1. Cook Ltd owns all of the share capital of James Ltd. The income tax rate is 30%. The following transactions took place during the periods ended 30 June 2019 or 30 June 2020.

1. In January 2020, Cook Ltd sells inventories to James Ltd for $10 000 in cash. These inventories had previously cost Cook Ltd $7 000, and remain unsold by James Ltd at the end of the period. (3 marks)

2. In February 2020, Cook Ltd sells inventories to James Ltd for $15 000 in cash. These inventories had previously cost Cook Ltd $12 000, and are on-sold externally on 2 April 2020. (2 marks)

3. In February 2020, James Ltd sells inventories to Cook Ltd for $22 000 in cash (original cost to James Ltd was $16 000) and one quarter (25%) are on-sold externally by 30 June 2020. (3 marks)

4. In March 2020, Cook Ltd sold inventories for $10 000 to Zara Ltd, an external entity. These inventories were transferred from James Ltd on 1 June 2019. The inventories had originally cost James Ltd $8000, and were sold to Cook Ltd for $12 000. (2 marks)

Required

In relation to the above intragroup transactions, prepare adjusting journal entries for the consolidation worksheet at 30 June 2020. Only the adjusting entries need be shown.