Wool Ltd acquired all the assets and liabilities of Rod Ltd on 1 July 2014. At this date, the assets and liabilities of Rod Ltd consisted of the following:

	Carrying Amount	Fair Value
Assets
Cash	300,000	300,000
Accounts receivable	200,000	200,000
Land	300,000	450,000
Vehicle	150,000	200,000
Accumulated depreciation -Vehicle	(50,000)
Liabilities
Accounts payable	250,000	250,000
Loans	200,000	200,000
Equity
Share Capital 100 000 shares	400,000
Reserves	50,000

In exchange for these assets and liabilities, Wool Ltd agreed to

1- Issue 3 Wool Ltd shares for every Rod Ltd Share Wool Ltd shares were considered to have a fair value of $4 per share; costs of issue were $600

2- Transfer a piece of Land to the former shareholders of Rod Ltd the Land was carried in the records of Wool Ltd at $300,000 but was considered to have a fair value of $600,000.

3- Pay $5 per share in cash to each of the former shareholders of Rod Ltd.

Wool Ltd incurred $3000 in costs associated with the acquisition of these net assets.

Required:

1. Calculate an Acquisition Analysis in relation to this acquisition? Show all workings. (2 marks)

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2. Prepare Journal entries in Wool Ltd to record the acquisition. (8marks)