Foreshore Ltd was incorporated on 1 July 2019, to acquire the business of Sharpe Trading as a going concern, the purchase consideration being settled by the issue of 102,000 \$1.00 ordinary shares in Foreshore Ltd fully paid. The ordinary shares of Foreshore Ltd have a fair value of \$1.00. The Statement of Financial Position of Sharpe Trading at the date of acquisition was as follows:
Sharpe Trading \textendash Statement of Financial Position as at 1 July 2019
$\qquad$
$\qquad$
Accounts Receivable
8,000
Bank overdraft
8,000
Less Allowance for
500
7,500 Accounts Payable
5,000
Doubtful debts
Mortgage on Freehold
20,000
Inventory
10,500
Owner's Equity
90,000
Freehold Premises
50,000
Plant \& Machinery
50,000
Less Accumulated Depreciation
10,000
40,000
Patents
15,000
123,000
Foreshore Ltd assesses the fair value of assets acquired to be:
Freehold Premises
\$90,000
Plant and Machinery
\$30,000
Patents
\$7,400
Inventory
\$8,600
Accounts Receivable
\$7,000
All liabilities of Sharpe Trading were accepted at book value by Foreshore Ltd.
Required: Prepare General Journal entries in the books of Foreshore Ltd to record:
(i) The acquisition of the net assets of Sharpe Trading by Foreshore Ltd.
(ii) The Payment of the purchase consideration to Sharpe Trading by Foreshore Ltd.
Journal entries must comply with the requirements of Accounting Standards.
