Additional information:1. At 20 May 2019, Henry Ltd sold inventory to Cahill Ltd for $888,000. This inventory originallycost Henry Ltd $735,000. By 30 June 2020, Cahill Ltd has sold 15% of the inventory to thirdparties.2. At 10 February 2018, Cahill Ltd transferred $20,000 from retained earnings to general reserve.3. On 30 September 2017, Henry Ltd sold machinery to Cahill Ltd for $580,000. The machineryoriginally cost Henry Ltd $900,000. The carrying amount at the date of sale was $250,000 and theremaining useful life of the machinery is 6 years.4. At 30 June 2020, Cahill Ltd reported a profit of $350,000 but did not pay dividends.5. The retained earnings of Cahill Ltd was $210,000 on 30 June 2019 and $450,000 on 30 June2020.6. The company tax rate is 30%.Requirements:(i) Prepare the equity accounting journal entries for Henry Ltd to apply the equity method to itsinvestment in Cahill Ltd for the year ended 30 June 2020.Use a table to display your entries using 3 columns: 1 column for the description, 1 column for the DEBITamount and 1 column for the CREDIT amount(ii) Equity acconting is referred to as "one line proportional consolidation". Evaluate how equityaccounting is similar or different to consolidation accounting.

A parent company, Henry Ltd, acquired on 1 July 2016 a 30% voting interest (and significant interest) in Cahill Led for $612,250 cash. At the date of acquisition, the accounts of Cahill Ltd include the following: Share capital 1,700,000 Retained earnings 250,000 Total equity 1,950,000 All the identifiable assets and liabilities of Cahill Ltd were recorded at fair value except for the following: Carrying amount Fair value Inventory $175,000 $325,000 The inventory was sold by 30 September 2016