Reference no: EM132627945

On 1 July 2020, Parent Ltd acquired 80% of the shares in Subsidiary Ltd for $150,000. At the acquisition date, the equity of Subsidiary Ltd were as follows:

$

General reserve. 20,000

Retained earnings. 40,000

Share capital (100,000 shares) 100,000

On acquisition date, all of Subsidiary Ltd's assets and liabilities were at their fair values except for:

                                            Carrying amount                      Fair Value

Inventories                          $20,000                              $23,000

Plant (cost $100,000)           $80,000.                            $88,000

Vehicles (cost $100,000)          $50,000.                        $51,000

Land                                $50,000                              $70,000

Parent Ltd adopts the partial goodwill method when accounting for non-controlling interests.

Required:

Problem 1: An acquisition analysis at 1 July 2020.