On 1 July 2021, B Ltd acquired all the assets and liabilities of P Ltd. In exchange for these assets and liabilities, Brad Ltd issued 100,000 shares that at date of issue had a fair value of $5.00 per share. Costs of issuing these shares amounted to $2,000. Legal costs associated with the acquisition of Pitt Ltd amounted to $3,000. The asset and liabilities of P Ltd at 1 July 2021 were as follows (Extract):

Assets Carrying Amount Fair Value

Cash $ 3 000 -

Account Receivable 12 000 $ 12 000

Inventories 63 000 69 000

Plant and equipment 330 000 225 000

Accumulated Depreciation Plant and Equipment (100 000) -

Land 200 000 280 000

Liabilities

Accounts payable 22 000 22 000

Debentures 68 000 68 000

Required: (a) Prepare the acquisition analysis at 1 July 2021 for the acquisition of P Ltd by B Ltd. Assume that at 30 June 2021, P Ltd had reported a contingent liability relating to a guarantee given by that company to another entity. P Ltd did not record the guarantee as a liability because of the difficulty of measuring the liability. The fair value of this contingent liability was assessed as $15 000. (4 marks) (b) Prepare the journal entries in the records of B Ltd at 1 July 2021. (4 marks