On 1 JULY 2018, WOW Ltd acquired all the share capital of Lotto Ltd for $1,300,000. At this date, the financial statements of Lotto Ltd included the following items; Retained Earnings $260,000 Share Capital $750,000 Asset Revaluation Surplus $105,000 At 1 JULY 2018 all of the identifiable net assets of Lotto Ltd were recorded at fair value except for the following assets; Inventory Land Carrying amount $72,000 $340,000 Fair value $79,000 $560,000 Adjustments for differences between carrying amounts and fair values of assets at acquisition date are made on consolidation. During the year ended 30 JUNE 2019, all inventory on hand at 1 JULY 2018 was sold. Land is sold during 2020 for $600,000. In JUNE 2020, Lotto Ltd conducted an impairment test and goodwill was considered to be impaired by $20,000. On 1 JUNE 2020, Lotto Ltd transferred $60,000 from the asset revaluation surplus (pre- acquisition) to retained earnings. The income tax rate is 30%. Required: 1. Prepare the acquisition analysis at 1 JULY 2018. 2. Prepare the business combination valuation entries and pre-acquisition entry at 30 JUNE 2020. 3. Explain briefly how your answer would change if WOW Ltd purchased 85% of the shares in Lotto Ltd in 1 JULY 2018.