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 Retained Earnings $54 000 36 000 All the identifiable assets and liabilities of Doe Ltd were recorded at amounts equal to their fair values except for the following: Carrying Amount Fair Value $90 000 16 000 94 000 $80 000 12 000 Inventories 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 vear