Assessment $2$ Question:

Cony Ltd is a wholly owned subsidiary of Brown Ltd$.$ The following transactions involving both companies took place during the $2023-2024$ Financial Year. Assume a corporate tax rate of $30\%.$

$1^{st}$ July $2023$: Brown purchased goods on credit from an external supplier for $$1,000.$

$1^{st}$ August $2023$: Brown made a credit sale of the goods that it purchased on $1^{st}$ July $2023$ to Cony for $$5,000.$ These goods remained unsold by Cony at financial year end.

$1^{st}$ October $2023$: Brown lent $$10,000$ to Cony at an interest rate of $12\%$ p$.$a$.$ Interest is to be paid when the loan matures in $1$ year.

$1^{st}$ November $2023$: Brown rented office space from Cony for $$12,000$ p$.$a$.$ The rent is to be paid when the rental contract matures in $1$ year.

$1^{st}$ June $2024$: Cony declared a final dividend of $$20,000.$ The dividend will be paid in July $2024.$

Required: Apply appropriate referencing and technical knowledge to address the following:

$($a$)$ Based on the intra$-$group transactions above, discuss the consolidation worksheet entries for the group as of ${30}^{th}$ June $2024.(5$ marks$)$

$($b$)$ Briefly explain the rationale underpinning the consolidation worksheet entries. That is$,$ why are these elimination entries necessary? Cite relevant Australian accounting standards where applicable. $(7$ marks$)$