SECTIOND: Worksheet entries at acquisition date

Alex Ltd acquired all the issued shares of Sam Ltd for$1 200 000 on 1 July 2019. At that date, the equity of Sam Ltd was recorded at:

Share capital$800 000

Retained earnings200 000

On 1 July 2019, all assets and liabilities of Sam Ltd were carried at their fair value other than;

Carrying amount Fair value

Inventory $60000$ 68000

Land $180000$195000

Equipment(Cost: $98000) $92000 $99000

(tax rate of 30%)

Required:

1. Acquisition analysis on 1 July 2019
2. Business combination valuation entries on 1 July 2019
3. Pre-acquisition entries on 1 July 2019