ABC Ltd owns 100 per cent of the shares of XYZ Ltd, acquired on 1 July 2019 for $350,000 when the shareholders funds of XYZ Ltd are:

Share capital $250,000

Retained earnings $180,000

$430,000

All assets of XYZ Ltd are stated at fair value on the acquisition date.

During the 2020 financial year, XYZ Ltd sells inventory to ABC Ltd at a sales price of $70,000. The inventory cost XYZ Ltd $50,000 to produce. 50% inventory is still on hand at the year end. XYZ Ltd borrows $100 000 from ABC Ltd on 1 July 2019 with an interest rate of 5% per annum. The loan is for 3 years. XYZ Ltd pays $30,000 dividends to ABC Ltd.

The tax rate is 30 per cent.

Required:

Show the relevant consolidated journal entries for the year ended 30 June 2020 (including tax effects where relevant).