On 1 July 2013 Donald Ltd acquired all of the share capital (cum div) of Duck Limited for a consideration of $600,000 cash and a brand that was held in their accounts at a fair value of $50,000. Duck Ltd reported a dividend payable of $8,000 at 1 July 2013.

At that date all the identifiable assets and liabilities were recorded at fair value with the exception of:

ASSET Book Value Market Value Inventory 10,000 14,000 Land 80,000 85,000 Plant 16,000 (less depn) (2000) 14,000 19,000 Acounts Receivable 20,000 18,000G A) Acquisition Analysis Fair Value of Identifiable Assets and Liabilities Equity Share Capital 420,000.00 General Reserve 90,000.00 Retained Earnings 70,000.00 $ 580,000.00 Revaluations Inventories 2,800.00 Land 3,500.00 Plant 3,500.00 (Accounts Receivable) (1,400.00) $ 8,400.00 Net Fair Value $ 588,400.00 Consideration Transferred Share Capital $ 600,000.00 (Dividend Paid) S (8,000.00) Brand S 50,000.00 $ 642,000.00 Goodwill Consideration Transferred $ 642,000.00 (Net Fair Value) S (588,400.00) $ 53,600.00