The accountant for Jessica Ltd, having studied the requirements of AASB 3 Business Combinations and AASB10 Consolidated Accounting, realises that all the identifiable assets and liabilities of Amelie Ltd must be recognised in the consolidated financial statements at fair value. As a result of this analysis, it was found that Amelie Ltd had declared dividend of $30 000 immediately before the acquisition date. Although he is happy about the valuation of these items, he is unsure of a number of other matters including pre-acquisition entries and business combination valuation reserves associated with accounting for these assets and liabilities. He has approached you and asked for your advice. Jessica Ltd has acquired all the shares of Amelie Ltd on 1 January 2020 for $ 240 000. At that date the equity of Amelie Ltd was recorded at: Share capital 20 000 $5.25 shares General reserve Retained earnings $105 000 50 000 70 000 All the assets and liabilities of Amelie Ltd were recorded at amounts equal to their fair values at that date. During the year ending 31 December 2020, Amelie Ltd undertook the following actions. On 5 April 2020, paid a dividend of $30 000 from the profits earned prior to 1 January 2020. On 28 December 2020, declared a dividend of $21 000 to be paid on 10 March 2021. On 1 May 2020, transferred $5 000 from the general reserve existing at 1 January 2020 to retained earnings. Required Write a report for the accountant at Jessica Ltd advising on the following issues: 1. What is the purpose of the business combination valuation entries? Explain. (5 Marks) 2. Is it necessary to distinguish pre-acquisition dividends from post-acquisition dividends? Discuss. (5 Marks) 3. What is the purpose of the pre-acquisition entries in the preparation of consolidated financial statements? Explain. (5 Marks) 4. Prepare the pre-acquisition entries at 1 January 2020. (10 Marks)