Question 4 (7 marks) On 1st January 2016, Soft Ltd acquired 70% of share capital of Hard Ltd for $8,175,000. Equity of Hard Ltd was: Share capital $7,600,000 General reserve $2,100,000 Retained earnings $1,200,000 All assets of Hard Ltd were recorded at fair value on acquisition except for an item of marine equipment that had a higher fair value of $360,000 than its carrying amount. Cost of the marine equipment was $2,100,000 accumulated depreciation of $1,372,000. Required: (a) Use the worksheet below to compute Goodwill or Gain on acquisition and the Non- controlling interest using net method. (3 marks) (b) Provide the necessary journal entries for Soft Ltd (parent) to eliminate Hard's share of pre-acquisition capital and reserves. (2 marks) (c) Prepare the journal entry to recognise the Non-controlling interest. (2 marks) 30% NCI Hard Ltd (s) $,000 Soft Ltd (P) $,000 Elimination of investment in Hard Ltd $,000 Fair Value of consideration transferred Less: FV of identifiable assets acquired and liabilities assumed Share capital on acquisition date Revalue surplus-acquisition date Retained earnings-acquisition date Fair value adjustment Goodwill / Gain on acquisition NON-controlling interest