Question 2 (11 marks)

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	91 835
Plant and equipment	fair value $327 983; carrying amount in the books of ABC Ltd $222 912
Land	fair value $393 579; carrying amount in the books of ABC Ltd $262 386

There are also legal fees of $249 267 involved in acquiring Red-X Ltd.

On 1 July 2021 Red-X Ltds statement of financial position shows total assets of $393 579 and liabilities of $393 575. The fair value of the assets is $1 049 544.

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.