On 1 July 2021, Atlantic Ltd acquired 100% of the share capital of Pacific Ltd for a cash consideration of $750,000. All identifiable assets and liabilities of Pacific Ltd were recorded at amounts equal to fair value, except as follows:

	Carrying amount	Fair value
Plant (cost $260,000)	$130,000	$150,000

Also, the assets of Pacific Ltd included a goodwill previously recorded of $20,000.

On 1 July 2021, the equity of Pacific Ltd consisted of:

Share capital	$500,000
Retained earnings	$200,000

Additional information:

• The following intragroup transactions took place between Atlantic Ltd and Pacific Ltd during the financial year ended 30 June 2022:

1. On 1 January 2022, Atlantic Ltd sold inventory to Pacific Ltd for $12,000, paid in cash. The original cost to Atlantic Ltd of this inventory was $7,000. By 30 June 2022, 60% of these goods had been sold by Pacific Ltd to external parties; the rest is still on hand. The remaining inventory are sold the following period.

• The following intragroup transactions took place between Atlantic Ltd and Pacific Ltd during the financial year ended 30 June 2023:1.

1. On 1 July 2022, Atlantic Ltd sold an equipment to Pacific Ltd for $30,000 in cash when it had a carrying amount of $21,000. At the date of sale it was expected that the equipment had a remaining useful life of 3 years, and no residual value. The equipment was not then sold to external parties.

• The tax rate is 30%.

Required

a) Prepare the acquisition analysis at 1 July 2021. (8 marks)

b) Prepare the business combination valuation entries in the consolidation journal of Atlantic Ltds group at 1 July 2021. Exclude journal narrations. (5 marks)

c) Prepare the pre-acquisition entries in the consolidation journal of Atlantic Ltds group at 1 July 2021. Exclude journal narrations. (3.5 marks)

d) Prepare the entries to eliminate the effects of intragroup transactions in the consolidation journal of Atlantic Ltds group at 30 June 2023. Exclude journal narrations. (9 marks)

e) Assume now Atlantic Ltd acquired only 80% of the share capital of Pacific Ltd for a cash consideration of $600,000 on 1 July 2021.

With all other condition unchanged, prepare the acquisition analysis at 1 July 2021 using the partial goodwill method including showing the value of non-controlling interests (NCI).