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Question - Train Ltd acquired 60% of Engine Ltd for a cost of $345,600, when the equity of Engine Ltd consisted of:
Share Capital $80,000
General Reserve $4,000
Retained Earnings $4,000
All the identifiable assets and liabilities of Engine Ltd were recorded at fair value except for the following:
Carrying Amount Fair Value
Equipment (cost $500,000) $360,000 $400,000
Inventory $80,000 $100,000
Required - Make the journal entries for the pre-acquisition stage (i.e., Stage 1) of recording the Non-Controlling Interest (NCI) using the partial goodwill method.
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