The practical project involves two parts: . Part A is the preparation of a selection of consolidation journal entries for an economic entity comprising a parent and a subsidiary. . Part B is an explanation and discussion of the business combination. Part A Cassie Ltd (Cassie) acquired all issued share capital of Cotter Lid (Cotter) on 1 July 2019 for a cash payment of $1,100,000. The share capital and retained earnings of Cotter at the date of acquisition were: Share capital $600,000 Retained earnings $250,000 At the date of acquisition all assets and liabilities of Cotter were carried at fair values with the exception of the following assets: Carrying amount Fair value Plant (cost $110 000) $90,000 $100,000 Land $110,000 $160,000 The plant had a further 10-year useful life as at the date of acquisition. The land was intended to hold for further use. There were no intra-group transactions between Cassie and Cotter between 1 July 2019 and 30 June 2021. On 1 March 2022 Cotter sold a machinery to Cassie for $145,000 when its carrying value in Cotter' books was $100,000 (original cost $200,000 and original estimated life of 8 years). There were no other intra-group transactions between Cassie and Cotter for year ended 30 June 2022. During January and May in 2023, Cassie made sales of inventory to Cotter for on-sale to external parties. The inventory had originally cost Cassie $40,000. At 30 June 2023, Cotter still had half of the inventory on hand. On-hand inventory was expected to be sold in the

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