Rivit Ltd acquired all assets and liabilities of Steel Ltd on 31 December 2020. The carrying amount and fair value of assets and liabilities taken over are as follows: Carrying amount ($) Fair value ($) Assets Cash 5,000 5,000 Accounts Receivables 750,000 720,000 Inventory 1,200,000 1,500,000 Property, Plant and Equipment (Net) 600,000 700,000 Liabilities Accounts payable 250,000 250,000 Provision for annual leave 150,000 150,000 In addition, due diligence identified the existence of a Trademarks that was valued by an expert at $125,000. The due diligence process also uncovered contingent liabilities (Guarantee Payable) that were measured at $75,000. The consideration paid was $2,450,000.

Required: 1. Calculate the amount of goodwill that would be recorded in the books of Rivit Ltd following the acquisition of Steel Ltd. Show all workings. (10 marks)

2. Record the journal entries for Rivit Ltd at acquisition date. (10 marks)