Question 1:

ABC Ltd has the following land and buildings in its financial statements as at 30 June 2022:

Residential land, at cost	2 000 000
Factory land, at valuation 2020	1 800 000
Buildings, at valuation 2020	1 600 000
Accumulated depreciation	(200 000)

At 30 June 2022, the balance of the revaluation surplus is $800 000, of which $600 000 relates to the factory land and $200 000 to the buildings. On this same date, independent valuations of the land and buildings are obtained. In relation to the above assets, the assessed fair values at 30 June 2022 are:

Residential land, previously recorded at cost	2 200 000
Factory land, previously revalued in 2020	1 400 000
Buildings, previously revalued in 2020	1 800 000

Required:

Provide the journal entries to account for the revaluation on 30 June 2022. ABC Ltd classifies the residential land and the factory land as different classes of assets.

Question 2:

XYZ Ltd acquires 100 per cent of Red-X Ltd on 1 July 2021. XYZ Ltd pays the shareholders of Red-X Ltd the following consideration:

Cash	70 000
Plant and equipment	fair value $250 000; carrying amount in the books of ABC Ltd $170 000
Land	fair value $300 000; carrying amount in the books of ABC Ltd $200 000

There are also legal fees of $190 000 involved in acquiring Red-X Ltd.

On 1 July 2021 Red-X Ltd's statement of financial position shows total assets of $300 000 and liabilities of $300 000. The fair value of the assets is $800 000.

Required:

Has any goodwill been acquired and, if so, how much? And discuss the potential for including associated legal fees into the cost of acquiring Red-X using appropriate accounting standard.