On 1 July 2020, Kent Ltd acquired all the share capital (cum-dividend) of Sub Ltd for $490,000. The financial statements of Kent Ltd showed the equity of Sub Ltd at that date to be:

Share capital 60 000 $5 shares $300 000

General reserve 40 000

Retained earnings 90 000

All the assets and liabilities of Sub Ltd were recorded at amounts equal to their fair values

at that date except the following:

	Carrying Amount	Fair value
Land	$150 000	$170 000
Plant (Cost $400 000)	$300 000	$350 000
Inventory	$75 000	$80 000

Additional information:

• On 31 March 2019 Sub declared a dividend of $10,000 (cum-div) basis. It was paid on 1 August 2020.
• On 10 September 2020, Sub Ltd paid interim cash dividend of $10,000.
• At acquisition date, 1 July 2020, Sub Ltd has an unrecorded Patent that has a fair value of $20,000, and a Contingent Liability that has a fair value of $15 000.
• Plant has expected to have a further 5-year life.
• The tax rate is 30%.

Required:

a)Prepare the acquisition analysis as of 1 July 2020.

b)Prepare the consolidation entries (i.e., BCVR and pre-acquisition elimination entries) on 30 June 2021.