On 1 July 2013 Tony Ltd acquired all of the share capital (cum div)of Claire Limited for a consideration of $600,000 cash and a brand with a fair value of $50,000. At the date of acquisition Claire's accounts showed a dividend payable of $8,000. At acquisition date all the identifiable assets and liabilities were recorded at fair value with the exception of: ASSET Book Value Market Value Inventory 10,000 14,000 Land 80,000 85,000 Plant 16,000 (less depn) (2000! 14,000 19,000 Acounts Receivable 20,000 18,000 The inventory was all sold by 30/6/14. The remaining useful life of the plant is 5 years. The accounts receivable were collected by 30/6/14 for $18,000. The land was sold on 30/12/16 for $90000. The plant was on hand still at 30/6/17. At the date of acquisition the equity of Claire Ltd consisted of: Share Capital 420,000 General Reserve 90,000 Retained Earnings 70,000 Information from the trial balances of Claire Ltd and Tony Ltd at 30 June 2017 is presented overleaf. Information from the trial balances of Claire Lid and Tony Lid at 30 June 2017 is presented overleaf. Additional Information 1. On 1 Jan 2017 Tony Ltd sold inventory to Claire Ltd costing $60,000 for $75,000. Half of this inventory was sold to outside parties by 30/6/17. 2. On 1 Jan 2016 Tony Lid sold inventory costing $9000 to Claire Ltd for $16,000. Claire Ltd treats the item as equipment and depreciates it at 10% per annum. 3.On 1 July 2016 Tony sold plant to Claire for $21,000. The plant had cost Tony $24,000 on 1 July 2014 and it was being depreciated at 10% per annum. Claire regards the plant as inventory. The inventory was all sold by 30th July 2016. 4. At 1 July 2016 Tony Ltd held inventory that it had purchased from Claire Ltd on 1 June 2016 at a profit of $9000. All inventory was sold by 30 June 2017 5. Claire Ltd accrues dividends from Tony Ltd once they are declared. 6. Claire Lid has earned $1200 in interest revenue in the 2017 financial year from Tony Ltd. 7. Claire Ltd has earned $3800 in service revenue in the 2017 financial year from Tony Ltd. 8. Assume a tax rate of 30%.Trial Balances As at 30 June 2017 Tony Ltd Claire Ltd DR CR DR CR Sales Revenue 1,247,100 952,500 Cost of Sales 788,000 456,000 Wages and Salaries 161,000 72,000 Depreciation Expense 17,000 8,000 Service Expense 3,500 4,800 Interest Expense 9,300 5,600 Other Expenses 4,000 6,000 Gain on Sale of Non Current Asset 7,000 Service Revenue 5,600 5,000 Interest Revenue 1,200 7,000 Dividend Revenue 5,500 Income tax expense 97,120 118,480 Retained Earnings 1/7/16 190,820 61,280 Dividend Paid 10,000 3,000 Dividend Declared 12,000 2,500 Share Capital 500,000 420,000 General Reserve 155,000 67,100 Other Equity 1/7/16 4,000 12,000 Gains on Financial Assets (OCI) 1,000 6,000 Loan Payable to Tony Ltd 16,000 Deferred Tax Liability 54,900 6,600 Dividend Payable 12,000 2,500 Shares in Claire Ltd 642,000Cash 86,000 147,500 Inventories 169,500 36,000 Other Current Assets 11,000 300,000 Dividend Receivable 2,500 Loan receivable from Claire Ltd 16,000 Financial Assets 15,000 68,000 Plant and Equipment 74,300 228,000 Acc. Depreciation Plant 12,600 12,900 Land 71,500 120,000 2,189,720 2,189,720 1,575,880 1,575,880Prepare the consolidation worksheet journal entries to eliminate the effects of inter-entity transactions as at 30 June 2017. Dr sales Cr cost of sales Cr Inventory Dr Deferred Tax Asset Cr Income Tax Expense Dr Retained earning Dr Deferred Tax Asset Cr Equipment Dr Accumulative Depreciation Cr Depreciation Expense Cr Retained earning Dr Retained earning Dr Income Tax Expense Cr Deferred Tax Asset Dr Gain on sale Cr Cost of sale