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Topic 8 Consolidation: Wholly Owned Subsidiaries Presentation Question Labrador Ltd acquired 100% of the issued capital of Tuscan Ltd on 1 July 2018. At the

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Topic 8 Consolidation: Wholly Owned Subsidiaries Presentation Question Labrador Ltd acquired 100% of the issued capital of Tuscan Ltd on 1 July 2018. At the date of acquisition, all the identifiable assets and liabilities of Tuscan Ltd were recorded at fair value except for: Carrying amount Fair value Inventory $55 000 $70 000 Plant (cost $500 000) $300 000 $350 000 The inventory was sold by 30 June 2019. The plant has a further useful life of 5 years with zero residual value. The corporate tax rate is 30%. Required Prepare the business combination valuation adjustments required for plant at 30 June 2019. Explain why these entries are made, noting the adjustment to each account separately. Topic 8 Consolidation: Wholly Owned Subsidiaries Presentation Question Labrador Ltd acquired 100% of the issued capital of Tuscan Ltd on 1 July 2018. At the date of acquisition, all the identifiable assets and liabilities of Tuscan Ltd were recorded at fair value except for: Carrying amount Fair value Inventory $55 000 $70 000 Plant (cost $500 000) $300 000 $350 000 The inventory was sold by 30 June 2019. The plant has a further useful life of 5 years with zero residual value. The corporate tax rate is 30%. Required Prepare the business combination valuation adjustments required for plant at 30 June 2019. Explain why these entries are made, noting the adjustment to each account separately

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