Consolidated financial statements

3.2 Hedley Lid acquired all shares in Byrne Led on 1 June 2016 ending 30 June 2019, Hedley Led sold inventory to Byrne Lid for $78 090 inventory had cost Hedley Lid $34 000. Bly the end of the year ending 30 june 3919 Byrne Led had sold three quarters of the inventory to Channel Lid and the temps. one quarter of the inventory was still held by Byrne Lid. Assume corporate tax rate is 30%. 9-01 Required: For the purposes of consolidated financial statements, discuss the reasons as to go need for the adjustment journal entries for the above intra-group transactions between the two entities and prepare the consolidation journal entries for the above transaction (7 marks)