Practice Question Jane Ltd is a major Australian manufacturer of noise-cancelling earphones. One of its major competitors was Doe Ltd whose business was established by an American family over 20 years ago. It had won numerous awards for its designs and functionality. The recent model "Silent X" has been extremely popular among audiophiles. In order to expand its business as well as to increase its market power, Jane Ltd acquired on 1 July 2018 all the issued shares of Doe Ltd for $120 000. At this date, the equity of Doe Ltd was as follows: Share Capital $54 000 36 000 Retained Earnings All the identifiable assets and liabilities of Doe Ltd were recorded at amounts equal to their fair values except for the followin Carrying Amount Fair Value $90 000 16 000 94 000 Land $80 000 Inventories 12 000 Machinery (cost $100 000) 82 500 The machinery's expected remanning useful life was 5 years with benefits being expected evenly over that period. The land was sold in September 2019. Of the inventories, 90% was sold by 30 June 2019 and the rest by the end of the following financial year In the notes to its financial statements at 30 June 2018, Doe Ltd disclosed a contingent liability relating to a lawsuit filed by Bose Ltd for copying its audio technology. Doe Ltd placed a fair value of $10 000 on this lawsuit. The case was settled in February 2020 for 20% less than the amount that Doe Ltd initially estimated During the period ended 30 June 2019, Doe Ltd made a transfer of $3 000 to the general reserve account from retained earnings earned prior to 1 July 2018 (i.e. pre-acquisition retained earnings The following intragroup transactions took place during the periods ended 30 June 2020 and 30 June 2021 Practice Question Jane Ltd is a major Australian manufacturer of noise-cancelling earphones. One of its major competitors was Doe Ltd whose business was established by an American family over 20 years ago. It had won numerous awards for its designs and functionality. The recent model "Silent X" has been extremely popular among audiophiles. In order to expand its business as well as to increase its market power, Jane Ltd acquired on 1 July 2018 all the issued shares of Doe Ltd for $120 000. At this date, the equity of Doe Ltd was as follows: Share Capital $54 000 36 000 Retained Earnings All the identifiable assets and liabilities of Doe Ltd were recorded at amounts equal to their fair values except for the followin Carrying Amount Fair Value $90 000 16 000 94 000 Land $80 000 Inventories 12 000 Machinery (cost $100 000) 82 500 The machinery's expected remanning useful life was 5 years with benefits being expected evenly over that period. The land was sold in September 2019. Of the inventories, 90% was sold by 30 June 2019 and the rest by the end of the following financial year In the notes to its financial statements at 30 June 2018, Doe Ltd disclosed a contingent liability relating to a lawsuit filed by Bose Ltd for copying its audio technology. Doe Ltd placed a fair value of $10 000 on this lawsuit. The case was settled in February 2020 for 20% less than the amount that Doe Ltd initially estimated During the period ended 30 June 2019, Doe Ltd made a transfer of $3 000 to the general reserve account from retained earnings earned prior to 1 July 2018 (i.e. pre-acquisition retained earnings The following intragroup transactions took place during the periods ended 30 June 2020 and 30 June 2021