Intragroup transfers of inventories, non-current assets, services and borrowings   LO2, 3, 4, 5, 7 Judith Ltd owns all the share capital of Mary Ltd. The income tax rate is 30%. The following transactions took place during the periods ended 30 June 2019 or 30 June 2020.

(a) On 1 May 2019, Mary Ltd sold inventories costing $200 to Judith Ltd for $400 on credit. On 30 June 2019, only half of these goods had been sold by Judith Ltd to external entities, and Judith Ltd had paid $300 to Mary Ltd. All remaining inventories were sold to external entities by 30 June 2020 and Judith Ltd paid the outstanding amount to Mary Ltd on 5 May 2020.

(b) On 1 January 2019, Judith Ltd sold an item of plant to Mary Ltd for $1000. Immediately before the sale, Judith Ltd had the item of plant on its accounts for $1500. Judith Ltd depreciated items at 5% p.a. on the diminishing balance and Mary Ltd used the straight-line method over 10 years

(c) An inventories item with a cost of $1000 was sold by Judith Ltd to Mary Ltd for $800 on 1 January 2020. Mary Ltd intended to use this item as equipment. Both entities charge depreciation at the rate of 10% p.a. on the diminishing balance on non-current assets. The item was still on hand at 30 June 2020.

(d) Judith Ltd provided management services to Mary Ltd during the period ended 30 June 2020. The total charge for those services was $3000, and that was unpaid at 30 June 2020.

(e) Judith Ltd borrows $50 000 from Mary Ltd on 1 July 2018 with an interest rate of 6% p.a. The loan is for 5 years. The interest is to be paid biannually in arrears, starting on 31 December 2018. Required In relation to the above intragroup transactions: 1. prepare adjusting journal entries for the consolidation worksheet at 30 June 2019 and 30 June 2020 2. explain in detail why you made each adjusting journal entry.