Reference no: EM132617873

During the financial year Pines Ltd made the following expenditures:

(a) It acquired a patent at a cost of $300 000. Shortly after the acquisition, Pines was offered $800 000 for the patent.

(b) It acquired another business called Dromana Ltd for a cost of $1 000 000 and will combine that business with its own. At the date of acquisition, Dromana Ltd had $100 000 in liabilities and assets with a fair value of $1 100 000. The assets acquired as part of the acquisition were recorded in Dromana's accounts at cost, but had the following fair values:

Carrying amount in Dromana Ltd's financials

Land (cost)                                        $400 000

Customer lists (internally generated)       Nil

Publishing titles (acquired)                     $50 000

REQUIRED

Problem 1: You are required to determine the amount at which the assets acquired by Pines Ltd will be shown within Pines Ltd's financial statements.