On 1^st January 2016, Soft Ltd acquired 70% of share capital of Hard Ltd for $8,175,000. Equity of Hard Ltd was:

Share capital$7,600,000

General reserve $2,100,000

Retained earnings $1,200,000

All assets of Hard Ltd were recorded at fair value on acquisition except for an item of marine equipment that had a higher fair value of $360,000 than its carrying amount. Cost of the marine equipment was $2,100,000 accumulated depreciation of $1,372,000.

Required:

1. Use the worksheet below to compute Goodwill or Gain on acquisition and the Non-controlling interest using net method.
2. Provide the necessary journal entries for Soft Ltd (parent) to eliminate Hard's share of pre-acquisition capital and reserves.
3. Prepare the journal entry to recognise the Non-controlling interest.

Hard Ltd Soft Ltd 30% NCI Elimination of investment in Hard Ltd (S) $,000 (P) $,000 $,000 Fair Value of consideration transferred Less: FV of identifiable assets acquired and liabilities assumed Share capital on acquisition date Revalue surplus-acquisition date Retained earnings-acquisition date Fair value adjustment Goodwill / Gain on acquisition NON-controlling interest