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Problem 1: R Ltd manufactures items of machinery. On 1 Jan 2020, T Ltd, a subsidiary of R Ltd acquired an item of machinery from R Ltd and recognises it as property, plant and equipment (PPE). This item of machinery was sold to T Ltd for $65,000 but it took R Ltd only $50,000 to manufacture. T Ltd depreciates its PPE at the rate of 10% on cost. In relation to this intra-group transaction, prepare adjusting journal entries for the consolidation worksheet at 30 June 2020. Assume tax rate of 30%.
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