Earth Ltd has 44% of the voting rights in Mars Ltd. The other 56% of voting rights in Mars Ltd are held by several hundred shareholders who are geographically dispersed. No other shareholder owns more than 1% of the voting rights in Mars Ltd. In general, few of the other shareholders attend Annual General Meetings. There are no arrangements between shareholders for making collective decisions.

Consolidation journal entries:

Parent Ltd (Parent) owns 80% of the issued shares of Subsidiary Ltd (Subsidiary). During the period ended 30 June 2016, the following transactions took place.

(a)In August 2015, Parent sold to external entities $2,000 worth of inventories that had been sold to it by Subsidiary in April 2015 at a profit before tax to Subsidiary of $200.

(b)In March 2016, Parent sold $10,000 worth of inventories to Subsidiary, recording a profit before tax of $1,000. At 30 June 2016, 10% of these inventories remained unsold by Subsidiary.

(c)In April 2016, Subsidiary sold $12,000 worth of inventories to Parent Ltd at a mark-up of 20%. At 30 June 2016, $1,200 of these inventories remained unsold by Parent Ltd.

(d)At 1 July 2014, Parent purchased plant from Subsidiary for $100,000. At that date, this plant had a carrying amount of $90,000 in the accounts of Subsidiary.

(e)At 30 June 2016, Parent recorded depreciation of $10,000 in relation to plant sold to it by Subsidiary on 1 July 2014. Parent uses a 10% p.a. straight-line depreciation method for plant.

Required:

Assuming a company tax rate of 30%, prepare consolidation journal entries to eliminate the effect of intra-group transactions as at 30 June 2016, considering the effect on non-controlling interest (NCI) where applicable.