On 1 July 2013, Rock Ltd acquired (ex div.) all of the issued capital of Wallaby Ltd. The recorded equity of Wallaby Ltd at this date consisted of:

Share capital	$120 000
General reserve	25 000
Retained earnings	55 000

At 1 July 2013, all the identifiable assets and liabilities of Wallaby Ltd were recorded at fair value except for the following assets:

Carrying amount	Fair value
Land	$100 000	$130 000
Inventory	78 500	86 100
Machinery (cost $86 000)	52 000	56 000
Vehicles (cost $58 000)	47 000	53 000

Additionally, Wallaby Ltds records showed a dividend payable at 1 July 2013 of $8000. This dividend was paid on 31 October 2013. The assets of Wallaby Ltd at acquisition date included goodwill recorded at $15 000 arising from a business combination transaction in 2009. At 1 July 2013, Wallaby Ltd owned but had not recorded an internally generated brand name.

This brand name was considered by Rock Ltd to have a fair value of $29 000 and an indefinite useful life. An impairment test conducted with respect to the brand name on 30 June 2016 concluded that its recoverable amount at that date was $2000 less than its carrying amount.

Adjustments for the differences between carrying amounts and fair values of assets and liabilities on hand at acquisition date are recognised on consolidation. When assets are sold or derecognised, any related valuation reserves are transferred to retained earnings. In June 2015, Wallaby Ltd paid a share dividend worth $20 000 from the general reserve on hand at 1 July 2013. The trial balances of both companies at 30 June 2016 showed the following balances:

The vehicles and machinery were expected to have a further useful life of 6 and 8 years respectively, with benefits to be received evenly over those periods. Inventory on hand at 1 July 2013 was all sold by 31 January 2014. The land owned at 1 July 2013 was sold in September 2014 for $150 000. The machinery on hand at 1 July 2013 was sold on 1 January 2016 for $38 000.

Debit balances	Rock Ltd	Wallaby Ltd
Cash	$ 2 500	$ 1 250
Receivables	27 000	13 000
Inventory	39 700	24 500
Other current assets	15 200	8 200
Deferred tax assets	7 500	3 500
Vehicles	88 000	158 000
Equipment		42 000
Land	140 000	180 000
Financial assets	68 000	14 800
Goodwill	28 000	15 000
Shares in Wallaby Ltd	250 000
Debentures in Rock Ltd		25 000
Dividend paid	10 000	5 000
Dividend declared	20 000	12 000
Transfer to general reserve	10 000	5 000
Cost of sales	210 000	192 550
Income tax expense	30 000	32 000
Depreciation and other expenses	39 000	36 000
Carrying amount of machinery sold		30 500
Carrying amount of equipment sold	21 000
$1 005 900	$798 300
Credit balances	Rock Ltd	Wallaby Ltd
Share capital	$ 200 000	$ 140 000
General reserve	35 000	10 000
Retained earnings (1/7/15)	51 300	67 500
Accounts payable	69 500	36 000
Loan payable (due 30/6/20)	25 000	15 000
Dividend payable	20 000	12 000
Provisions	12 500	9 300
Current tax liability	43 000	34 000
Deferred tax liability	11 800	5 000
Accumulated depreciation vehicles	16 400	60 000
Accumulated depreciation equipment		34 500
8% Debentures (matures 30/6/19)	25 000
Sales revenue	450 000	320 000
Dividend revenue	17 000
Other income	11 400	17 000
Proceeds on sale of equipment	18 000
Proceeds on sale of machinery		38 000
$1 005 900	$798 300

Additional information

Dividends may be declared by either company without shareholder approval.

The tax rate is 30%.

On 1 January 2016, Rock Ltd sold an item of equipment to Wallaby Ltd for $18 000. The equipment had a carrying amount at the date of sale of $21 000. Both companies depreciate equipment at 20% p.a. on a straight-line basis.

On 1 May 2015, Wallaby Ltd sold a machine to Rock Ltd for $7800. The machine had a carrying amount of $7000 at the date of sale. Rock Ltd recorded the machine as inventory. The inventory item was sold to an external party in November 2015 for $8200

All interest on the 8% debentures has been paid and brought to account in the records of both companies.

During the 201516 financial year, Rock Ltd sold inventory to Wallaby Ltd for $75 000. The cost of this inventory to Wallaby Ltd was $70 000. Of this inventory, 25% is still on hand at 30 June 2016.

The transfer to general reserve recorded by Wallaby Ltd in the current year was from retained earnings recorded at 1 July 2013.

Required

Prepare the consolidation worksheet journal entries for the preparation of the consolidated financial statements of Rock Ltd at 30 June 2016.