script s choo\ of usiocss Application for Access to Examination Financial and Corporate Accounting Question 1 Ltd acquired all of the assets and liabilities of Jewels Ltd on 1 July assets and liabilities, and their 2015. The carrying amounts of fair values at the date of acquisition are listed below. Item Accounts receivable Land and buildings Plant & Equipment Patent Accounts payable Accumulated Carrying Cost depreciation] amount amortisation 140,000 500,000 470,000 60,000 60,000 250,000 370,000 140,000 250,000 100,000 60,000 60,000 Fair value 126,000 375,000 90,000 80,000 60,000 Included in the purchases by Crown Ltd was an identifiable intangible asset of a trademark developed over the years by Jewels Ltd. The trademark has a fair value of $130,000. The purchase consideration for the business consisted of 500,000 ordinary shares in Crown Ltd valued at $1.50 each, and $50,000 in cash. Crown Ltd incurred legal fees of $5,000 to process the purchase and $2,000 of direct costs to issue the shares. Required a Prepare the general journal entries to record both the purchase by Crown Ltd under AASB 3 Business Combinations and the payment to Jewels Ltd. Narrations are not required. [10 marks] b Instead of acquiring all the assets and liabilities, Crown Ltd acquired 100% of the equity of Jewels Ltd on 1 July 2015, for $600,000 cash. At the time of acquisition, the equity accounts included $500,000 share capital, a general reserve of $80,000, and retained earnings of $31,000. For simplicity, let us assume that all of the assets and liabilities were yevalued to fair value in Jewels Ltd's balance sheet. i Prepare the general journal entries, to record thepurchase of Jewels Ltd in Crown Ltd's bookS. Taxrate ist300/0t Narrations are not required. [2 marks] Semester 1/2017 Ordinary Exam