3. Intragroup transfers of inventories, non-current assets, services and dividends 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 to 30 June 20X4. (a) In February 20X2, Karen Ltd sold inventories to Anne Ltd for $6000, at a mark-up of 20% on cost. One-quarter of this inventories were unsold by Anne Ltd at 30 June 20X2 to external parties and none at 30 June 20X3. (b) On 1 January 20X2, Anne Ltd sold a new tractor to Karen Ltd for $20 000. This had cost Anne Ltd $16 000 on that day. Both entities charged depreciation at the rate of 10% p.a. on the diminishing balance. The tractor was still on hand with Karen Ltd at 30 June 20X4. (c) A non-current asset with a carrying amount of $1000 was sold by Karen Ltd to Anne Ltd for $800 on 1 January 20X4. Anne Ltd intended to use this item as inventories, being a seller of second-hand goods. The item was still on hand at 30 June 20X4. (d) Anne Ltd rented a spare warehouse to Karen Ltd starting from 1 July 20X3 for 1 year. The total charge for the rental was $300, and Karen Ltd paid half of this amount to Anne Ltd on 1 January 20X4 and the rest is to be paid on 1 July 20X4. (e) In December 20X3, Anne Ltd paid a $1500 interim dividend. (f) During March 20X4, Anne Ltd declared a $3000 dividend. The dividend was paid in August 20X4. Required In relation to the above intragroup transactions: i) Prepare adjusting journal entries for the consolidation worksheet at 30 June 20X3 and 30 June 20X4. ii) Explain in detail why you made each adjusting journal entry