Undervalued assets, full and partial goodwill method  LO3, 4, 5 On 1 July 2019, Ethan Ltd acquired 90% of the issued shares of James Ltd for $290 160. The equity of James Ltd at this date consisted of: Share capital $200 000 Retained earnings 80 000 The carrying amounts and fair values of the assets and liabilities recorded by James Ltd at 1 July 2019 were as follows. Carrying amount Fair value Inventories $ 10 000 $ 12 000 Fittings (net) 20 000 20 000 Land 90 000 100 000 Machinery (net) 200 000 220 000 Liabilities 40 000 40 000 All inventories on hand at 1 July 2019 are sold by 30 June 2020. The fittings and machinery have a further 10‐year life beyond 1 July 2019, with benefits to be received evenly over this period. Differences between carrying amounts and fair values are recognised in the consolidation worksheet. Ethan Ltd uses the partial goodwill method. The tax rate is 30%. Required 1. Prepare the acquisition analysis at acquisition date. 2. Prepare the business combination valuation entries and the pre‐acquisition entry at acquisition date. 3. Prepare the journal entry to recognise NCI at acquisition date. 4. Prepare the consolidation worksheet entries at 30 June 2020. Assume a profit for James Ltd for the year ended 30 June 2020 of $40 000 and no other changes in James Ltd’s equity since the acquisition date. 5. Identify and prepare the journal entries in requirements 2 to 4 that will change if the full goodwill method is used. Assume a fair value for NCI on 1 July 2019 of $31 800.