On 1 January 2017, Olivia Ltd acquired all the share capital of Chloe Ltd for $300 000. The equity of Chloe Ltd at 1 January 2017 was as follows.

	$
Contributed equity	200,000
General reserve	20,000
Retained earnings	50,000
	270,000

At this date, all identifiable assets and liabilities of Chloe Ltd were recorded at fair value.

The following information has been provided about transactions between the two entities: - The beginning and ending inventories of Olivia Ltd and Chloe Ltd in relation to the current period ended on 31 December 2019 included the following inventories transferred intragroup:

	Olivia Ltd	Chloe Ltd
Beginning inventory
Transfer price	$2,000	$1,200
Original cost	$1,400	$800
Ending inventory
Transfer price	$500	$900
Original cost	$300	$700

During the current period, Olivia Ltd sold inventories to Chloe Ltd for $3,000 and Chloe Ltd sold inventories to Olivia Ltd for $2,500.

- On 31 December 2019, Chloe Ltd owes Olivia Ltd $1,000 for items sold on credit.

- Chloe Ltd undertook an advertising campaign for Olivia Ltd during the period ended 31 December 2019. Olivia Ltd was charged and paid $8,000 to Chloe Ltd for this service.

- Olivia Ltd received dividends totalling $63,000 during the current period ended 31 December 2019 from Chloe Ltd. These dividends were declared in the current period out of post-acquisition profits.

Required

a) Provide the acquisition analysis.

b) Record the consolidation journal entries necessary at 31 December 2019.