On 1 July 2019, Seacome Ltd acquired all issued shares of Heights Ltd on a cum dividend

basis, paying $578 160 cash. At this date, Heights Ltd had recorded $24 000 dividend

payable and an equity consisting of:

Share capital $259 200

Retained earnings 172 800

General reserve 86 400

All the identifiable assets and liabilities of Heights Ltd were recorded at the amounts equal to

their fair values at acquisition date except for:

Asset Carrying Amount ($) Fair Value ($)

Inventories 67 200 76 800

Plant (cost $480 000) 444 000 451 200

Additional information:

The plant was considered to have a further 5-year life, and depreciated at 20% per

annum on cost. All inventories were sold by 30 June 2020.

In April 2020, Heights Ltd transferred $14 400 from Retained Earnings existing at 1

July 2019 to General Reserve.

The dividend payable at the acquisition date was paid in May 2020.

The company tax rate is 30%.