On 1 July 2020, Kerry Ltd acquired 100% of the issued shares of James Ltd on a cummulative dividend basis. The fair value of the consideration paid was measured at $250,000. At this date, the records of James Ltd included the following information: Share Capital $200,000 Retained Earnings $20,000 Asset Revaluation reserve $5,000 Dividends payable $5,000 Goodwill $2,000 The dividend liability at 1 July 2020 was paid in September 2020. At 1 July 2020, all the identifiable assets and liabilities of James Ltd were recorded in the subsidiarys books at fair value except for the following assets: Carrying Amount Fair Value Inventory $40,000 $46,000 Property and Equipment $100,000 $115,000 The inventory was all sold by 30 June 2021. The Property and equipment has a further 5-year life and is depreciated on a straight-line basis. Goodwill was not impaired in any period. When assets are sold or fully consumed, any relating business combination valuation reserve is transferred to retained earnings. The tax rate is 30%.

Part A: Prepare Acquisition analysis as at 1 July 2020

Part B: Prepare the pre-acquisition entries at 30 June 2021.