2: Equity Accounting (30 Marks) Wayne Ltd owns 25% of the shares of its associate, Peter Ltd. At the acquisition date, there were no differences between the fair values and the carrying amounts of the identifiable assets and liabilities of Peter Ltd. For 2015-16, Peter Ltd recorded a profit of $100 000 after tax. During this period, Peter Ltd paid a $10 000 dividend, declared in June 2015, and an interim dividend of $8000. The tax rate is 30%. The following transactions have occurred between Wayne Ltd and Peter Ltd: a. On 1 January 2016, Peter Ltd sold an item of plant to Wayne Ltd for $15 000. The carrying amount of the asset to Peter Ltd at time of sale was $12 000. Wayne Ltd applies a 15% p.a. straight-line method of depreciation. b. A non-current asset with a carrying amount of $20 000 was sold by Peter Ltd to Wayne Ltd for $28 000 on 1 June 2016. Wayne Ltd regarded the item as inventory and still had the item on hand at 30 June 2016. c. On 1 July 2014, Wayne Ltd sold an item of machinery to Peter Ltd for $6000. This item had cost Wayne Ltd $4000. Wayne Ltd regarded this item as inventory whereas Peter Ltd intended to use the item as a non-current asset. Peter Ltd applied a 10% p.a. on cost straight-line depreciation method. Required Wayne Ltd applies AASB 128 in accounting for its investment in Peter Ltd. Assuming Wayne Ltd does not prepare consolidated financial statements, prepare the journal entries in the records of Wayne Ltd for the year ended 30 June 2016 in relation to its investment in Peter Ltd