2. Current and prior periods intragroup transfers of inventories Karen Ltd owns all the share capital of Anne Ltd. The income tax rate is 30%. The following transactions took place during the periods ended 30 June 20X2 or 30 June 20X3. (a) On 1 May 20X2, Karen Ltd sold inventories to Anne Ltd for $5 000 on credit, recording a profit of $1000. Half of the inventories were unsold by Anne Ltd at 30 June 20X2 and none at 30 June 20X3. Anne Ltd paid half the amount owed on 15 June 20X2 and the rest on 1 July 20X2. 2 (b) On 10 June 20X2, Anne Ltd sold inventories to Karen Ltd for $18 000 in cash. The inventories had previously cost Anne Ltd $14 000. Half of these inventories were unsold by Karen Ltd at 30 June 20X2 and 30% at 30 June 20X3. (c) On 1 January 20X3, Anne Ltd sold inventories costing $5000 to Karen Ltd at a transfer price of $8000, paid in cash. The entire inventories were sold by Karen Ltd to external entities by 30 June 20X3. Required In relation to the above intragroup transactions: 1) Prepare adjusting journal entries for the consolidation worksheet at 30 June 20X2 and 30 June 20X3. ii) Explain in detail why you made each adjusting journal entry