Undervalued and unrecorded assets, unrecorded liabilities

just help to exaplain the Q2 I canot understand why the equipment is 50000

On 1 July 2024, Belka Ltd acquired all the issued shares of Nungatta Ltd for a cash consideration of $1 200 000. At that date, the financial statements of Nungatta Ltd showed the following information.

Share capital	$800 000
General reserve	50 000
Retained earnings	300 000

All the assets and liabilities of Nungatta Ltd were recorded at amounts equal to their fair values at the acquisition date, except some equipment recorded at $30 000 below its fair value with a related accumulated depreciation of $80 000. Also, Belka Ltd identified at acquisition date a contingent liability related to a lawsuit where Nungatta Ltd was sued by a former supplier and attached a fair value of $20 000 to that liability.

Required

1. Prepare the acquisition analysis at 1 July 2024.
2. Prepare the consolidation worksheet entries for Belka Ltds group at 1 July 2024, assuming that Nungatta Ltd has not revalued the equipment in its own accounts.

1. Acquisition analysis at 1 July 2024:

Net fair value of identifiable assets

and liabilities acquired = ($800 000 + $50 000 + $300 000) (equity)

+ $30 000 x (1 30%) (BCVR equipment)

- $20 000 x (1 30%) (BCVR cont. liability)

= $1 157 000

Consideration transferred = $1 200 000

Goodwill = $1 200 000 $1 157 000

= $43 000

2. Consolidation worksheet entries at 1 July 2024 if the equipment is not revalued in subsidiarys accounts:

BCVR entries at 1 July 2024:

The BCVR entries will need to recognise the increase in value of the equipment, the contingent liability that was not recorded prior to the acquisition date in the subsidiarys accounts and the goodwill identified in the acquisition analysis. It is assumed that the carrying amount of the equipment is $30 000 below its fair value, meaning its historical cost is $50 000 above its fair value given the accumulated depreciation of $80 000.

Accumulated depreciation equipment Dr 80 000

Equipment Cr 50 000

Business combination valuation reserve Cr 21 000

Deferred tax liability Cr 9 000

Deferred tax asset Dr 6 000

Business combination valuation reserve Dr 14 000

Provision for damages Cr 20 000

Goodwill Dr 43 000

Business combination valuation reserve Cr 43 000

Pre-acquisition entry at 1 July 2024:

Retained earnings (1/7/24) Dr 300 000

General reserve Dr 50 000

Share capital Dr 800 000

Business combination valuation reserve Dr 50 000

Shares in Nungatta Ltd Cr 1 200 000