Patron Ltd acquires all the issued capital of Questro Ltd for a cash payment of $8 250 000 on 30 June 2020. At this date, all assets were fairly valued except for land, which had a fair value of

$1 950 000 (carrying amount of $1 500 000). The tax rate is 30%. At date of acquisition the share capital and reserves of Questro Ltd were as follows:

Share capital 3 000 000

Retained earnings 4 200 000

7 200 000

Required (15 marks)

(i) Prepare the business combination valuation entries required by Questro Ltd to revalue land to fair value at the date of acquisition.

(ii) Calculate the amount of goodwill or gain on bargain purchase subsequent to revaluation of land.

(iii) Prepare consolidation journal entry to eliminate investment in subsidiary.