Amani Ltd owns all of the share capital of Rebecca Ltd. The following transactions took place during the periods ended 30 June 2019 or 30 June 2020. 2 1. In January 2020, Amani Ltd sells inventories to Rebecca Ltd for $15,000 in cash. These inventories had previously cost Amani Ltd $10,000, and remain unsold by Rebecca Ltd at the end of the period. 2. In February 2020, Amani Ltd sells inventories to Rebecca Ltd for $17,000 in cash. These inventories had previously cost Amani Ltd $12,000, and are on-sold externally on 2 April 2020. 3. In February 2020, Rebecca Ltd sells inventories to Amani Ltd for $22,000 in cash (original cost to Rebecca Ltd was $16,000) and half are on-sold externally by 30 June 2020. 4. In March 2020, Amani Ltd sold inventories for $10,000 to Zara Ltd, an external entity. These inventories were transferred from Rebecca Ltd on 1 June 2019. The inventories had originally cost Rebecca Ltd $6,000, and were sold to Amani Ltd for $12,000.

Required

In relation to the above intragroup transactions:

a) Prepare adjusting journal entries for the consolidation worksheet at 30 June 2020.

b) Explain in detail why you made each adjusting journal entry.