XYZ Ltd acquired a 70% interest in ABC Ltd on 1 July 2020 for $500,000.On the same date, the balance of shareholders' equity of S Ltd comprised:

Share capital$50,000

General reserve10,000

Retained earnings15,000

75,000

All assets are recorded at their fair values except for an item of buildings, which had a fair value of $500,000 and a carrying amount of $350,000 (original cost $400,000). The building has remaining life of 10 years.

The fair value of the Non-Controlling Interest (NCI) in ABC Ltd on 1 July 2020 was $50,000.

Required

1.Calculate acquisition analysis using partial goodwill method.

2.Prepare the necessary journal entries under partial goodwill method