Hello can someone explain me what jornal entires msut be done for the financail period June 2016 with explanations in deatils please. Thnaks

Current and prior periods intragroup transfers of non-current assets

Sophie Ltd owns all the share capital of Ruby Ltd. The following transactions relate to the period ended 30 June 2017. Assume an income tax rate of 30%.

(a) On 1 July 2016, Sophie Ltd sold a motor vehicle to Ruby Ltd for $15 000. This had a carrying amount to Sophie Ltd of $12 000. Both entities depreciate motor vehicles at a rate of 10% p.a. on cost.

(b) Ruby Ltd manufactures items of machinery which are used as property, plant and equipment by other companies, including Sophie Ltd. On 1 January 2017, Ruby Ltd sold such an item to Sophie Ltd for $62 000, its cost to Ruby Ltd being only $55 000 to manufacture. Sophie Ltd charges depreciation on these machines at 20% p.a. on the diminishing value.

(c) Sophie Ltd manufactures certain items which it then markets through Ruby Ltd. During the current period, Sophie Ltd sold for $12 000 items to Ruby Ltd at cost plus 20%. By 30 June 2017, Ruby Ltd has sold to external entities 75% of these transferred items.

(d) Ruby Ltd also sells second-hand machinery. Sophie Ltd sold one of its depreciable assets (original cost $40 000, accumulated depreciation $32 000) to Ruby Ltd for $5000 on 1 January 2017. Ruby Ltd had not resold the item by 30 June 2017.

(e) Ruby Ltd sold a depreciable asset (carrying amount of $22 000) to Sophie Ltd on 1 January 2016 for $25 000. Both entities charge depreciation in relation to these items at a rate of 10% p.a. on cost. On 31 December 2016, Sophie Ltd sold this asset to Dubbo Ltd, an external entity, for $20 000.

Required

In relation to the above intragroup transactions:

1. Prepare adjusting journal entries for the consolidation worksheet at 30 June 2016 and 30 June 2017.

2. Explain in detail why you made each adjusting journal entry.