Financial information for Sydney Ltd and its 100% owned subsidiary, Grey Ltd, for the period ended 30 June 2020 is provided below.

	Sydney Ltd	Grey Ltd
Sales revenue	$283 000	$98 000
Cost of sales	(169 000)	(57 000)
Gross Profit	114 000	41 000
Dividend revenue	71 500
Other income	56 300	7 000
Gains on sale of non-current assets	10 000	4 500
Total income	251 800	52 500
Admin and other expenses	(150 800)	(30 500)
Profit before income tax	101 000	22 000
Income tax expense	(20 300)	(6 600)
Profit for the year	80 700	15 400
Retained earnings (1/7/19)	315 300	120 000
	396 000	135 400
Interim dividend paid	(10 000)	(4 500)
Final dividend declared	(14 000)	(9 000)
Retained earnings (30/6/20)	$372 000	$121 900

Sydney Ltd acquired all the issued shares (cumdiv.) of Grey Ltd on 1 July 2019 for $752,000. At this date the equity of Grey Ltd consisted of:

Share capital $420,000

Retained earnings 120,000

Grey Ltd had declared before the acquisition a dividend payment of $22,000, which was paid later in August 2019. All of the identifiable assets and liabilities of Grey Ltd were recorded at amounts equal to their fair values except for the following:

	Carrying amount	Fair value
Inventory	$190,000	$250,000
Plant (accumulated depreciation of $60,000)	440,000	480,000

Of the inventory on hand on 1 July 2019, only 30% remained unsold by 30 June 2020. The plant on hand at the date of acquisition was expected to have a further useful life of 5 years. The companies in the group use the straight-line method of depreciation. The tax rate is 30%.

During the 20192020 year, the following transactions occurred:

1. Sydney Ltd sold inventory to Grey Ltd for $50,000 at a profit before tax of $8 000. This inventory had originally cost Sydney Ltd $42,000. This inventory was still on hand in the books of Grey Ltd on 30 June 2020.
2. Sydney Ltd charged Grey Ltd management fees of $25,000. This amount was paid by 30 June 2020.
3. On 1 January 2020, Sydney Ltd sold machinery to Grey Ltd for $55,000, with a gain on sale of $7,000. The machinery was considered to have a further 5-year life.
4. On 30 June 2020, an impairment test was conducted on Grey Ltd, and this resulted in recognition of an impairment loss on the goodwill on acquisition of $30,000 (this has no tax effect).
5. On 30 June 2020, the directors of Grey Ltd declared a dividend of $9,000. Sydney Ltd records dividend receivable as revenue when dividends are declared. This dividend remained unpaid at the end of the year.

Required:

1. Prepare the acquisition analysis as of 1 July 2019.
2. Prepare the journal entries necessary to prepare consolidated financial statements as of the date of acquisition on 1 July 2019. Show all workings and narrations.
3. Prepare the journal entries necessary to prepare consolidated financial statements as of 30 June 2020. Show all workings and narrations.