Flashy Ltd is involved in the manufacture of Ugg boots. The director wishes to sell the business to a long-standing competitor, Boots Ltd. The financial statements of Flashy Ltd at 1 July 2019 contained the following information: Assets Current assets Cash 7,500 Accounts receivable 11,000 Inventories 16,500 Total current assets 35,000 Non-current assets Vehicles 32,000 Accumulated depreciation (5,500) Trucks 37,000 Accumulated depreciation (6,300) Machinery 22,000 Accumulated depreciation (3,000) Buildings 49,000 Accumulated depreciation (4,500) Land 90,000 Total non-current assets 210,700 Total assets 245,700 Liabilities Accounts payable 18,900 Other payables 41,000 Provisions 27,000 Loans 63,000 Total liabilities 149,900

Equity Share capital: 50,000 shares 48,000 Retained earnings 47,800 Total equity 95,800 An agreement was made whereby Boots Ltd takes over Flashy Ltd. Boots Ltd will acquire all the assets and liabilities of Flashy Ltd, except for the cash, motor vehicles and accounts payable. In exchange, Boots Ltd will give the shareholders of Flashy Ltd a block of land valued at $86,000 and a motor vehicle valued at $21,400. The land is carried at a cost of $40,000 while the motor vehicle is carried at $22,000, comprising cost of $23,000 and accumulated depreciation of $1,000. Boots Ltd will also provide sufficient additional cash to enable Flashy Ltd to pay off the accounts payable and the liquidation expenses of $4,300. Boots Ltd recognised the brand Flashy that was not recognised in the records of Flashy Ltd as it was an internally developed brand. It was calculated that this brand had a fair value of $22,000. Boots Ltd also incurred legal and valuation costs of $2,000 in undertaking the business combination. The assets and liabilities of Flashy Ltd are recorded at amounts equal to fair value except for the following: Fair value Land 100,000 Buildings 56,000 Machinery 20,000 Trucks 30,000 Inventories 20,000 Required: 1. Prepare the acquisition analysis in relation to the acquisition to determine the gain on bargain purchase or goodwill. 2. Prepare the journal entries in the records of Boots Ltd to record its acquisition of Flashy Ltd on 1 July 2019.