Reference no: EM132462477

Fred Ltd owns all of the share capital of Toby Ltd. The income tax rate is 30%. The following transactions took place during the periods ended 30 June 2019.

Point (a) On 1 July 2018, Fred Ltd sold equipment costing $10 000 to Toby Ltd for $12 000. Fred Ltd had not charged any depreciation on the asset before the sale as it just purchased it from an external entity. Both entities depreciate items of equipment at 10% p.a. on cost. The equipment is still held by Toby Ltd at 30 June 2020.

Point (b) During the period ended 30 June 2019, Toby Ltd paid an interim dividend of $10 000 out of pre-acquisition profits.

Point (c) On 30 June 2019, Toby Ltd declared a final dividend of $20 000 out of post-acquisition profits.

Point (d) On 1 May 2019, Fred Ltd sold inventories to Toby Ltd for $10 000, recording a profit of $2000. Half of the inventories were unsold by Toby Ltd at 30 June 2019.

Point (e) On 10 June 2019, Toby Ltd sold inventories to Fred Ltd for $15 000 in cash. The inventories had previously cost Toby Ltd $12 000. One-third of these inventories were unsold by Fred Ltd at 30 June 2019.

Question 1: What is the adjusting journal entries for the consolidation worksheet at 30 June 2019 ?