ABC Ltd owns 30% shares of XYZ Ltd for $50,000 on 1 July 2019. At the acquisition date, all identifiable assets and liabilities of XYZ Ltd are carried at the fair values.

For the year ended 30 June 2022, XYZ Ltd recorded after-tax profit of $200,000. During this period, XYZ Ltd paid an interim dividend of $20,000.

The opening post acquisition retained earnings at 1 July 2021 was $150,000.

The following transactions have occurred between ABC Ltd and XYZ Ltd:

1. On 1 January 2022, XYZ Ltd sold inventory to ABC Ltd for $95,000. The profit is set at 25% on selling price. A quarter of this inventory is still on hand at 30 June 2022.

2. In June 2021, ABC Ltd sold inventory to XYZ Ltd recording a profit of $7,000 on the sale. This inventory was sold by XYZ Ltd to DEF Ltd in August 2021.

3. On 1 July 2021, ABC Ltd sold an item of plant to Deer Ltd for $15 000. The carrying amount of the asset to ABC Ltd at time of sale was $12 000.

4. ABC Ltd and XYZ Ltd depreciates the items of Property, Plant & Equipment (PPE) using the straight-line method at 20%.

5. The tax rate is 30%.

Required

Prepare the journal entries in the records of ABC Ltd for the year ended 30 June 2022 in relation to its investment in Deer Ltd, in accordance with the requirements of IAS 28/ AASB 128 Investment in Associates . ABC Ltd does not prepare consolidated financial statements.