xxx Ltd acquired 100% of the issued capital of AAA Ltd on 1 July 2018. At the date of acquisition, all the identifiable assets and liabilities of AAA Ltd were recorded at fair value except for:

Inventory $55 000 carrying amount) $70 000(fair value)

Plant (cost $500 000) $300 000(carrying amount) $350 000 (fair value)

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