Question $3$

Acquisition Analysis

$12$ Marks

P Ltd acquired all the shares of S Ltd on $1$ July $2018$ for $\backslash (\backslash$$ $44000\backslash ).$ On this date, the equity of S Ltd consists of:

On this date, land held by S Ltd is recorded at $\backslash (\backslash$$ $20000\backslash ),$ fair value is $\backslash (\backslash$$ $30000\backslash ).$ It was revealed that S Ltd has an unrecorded provision for loan guarantee of $\backslash (\backslash$$ $20000\backslash ).$ Tax rate is $\backslash (30\backslash \%\backslash ).$

Required:

$($a$)$ Prepare the acquisition analysis.

$(3$ Marks$)$

$($b$)$ Prepare the necessary journal entries

$(9$ Marks$)$