On 1 July 2015, Tuna Ltd acquired all the issued shares of Brim Ltd. Tuna Ltd paid $30 000 in cash and 20 000 shares in Tuna Ltd valued at $3 per share. At this date, the equity of Brim Ltd consisted of $66 000 share capital and $6000 retained earnings.

At 1 July 2015, all the identifiable assets and liabilities of Brim Ltd were recorded at amounts equal to their fair values except for:

Carrying amount Fair value Plant (cost $150000) $120000 $123000 Patents 90000 105000 Inventory 18000 22500

The plant was considered to have a further 5-year life. The patents were sold for $120 000 to

an external entity on 18 August 2015. The inventory was all sold by 30 June 2016.

Additional information

(a) Tuna Ltd sells certain raw materials to Brim Ltd to be used in its manufacturing process.

At 1 July 2016, Brim Ltd held inventory sold to it by Tuna Ltd in the previous year at a profit of $600. During the 2016-17-year, Tuna Ltd sold inventory to Brim Ltd for $21 000. None of this was on hand at 30 June 2017.

(b) Brim Ltd also sells items of inventory to Tuna Ltd. During the 2016-17 year, Brim Ltd sold goods to Tuna Ltd for $4500. At 30 June 2017, inventory which had been sold to Tuna Ltd at a profit of $300 was still on hand in Tuna Ltd.'s inventory.

(c) On 1 July 2016, Brim Ltd sold an item of plant to Tuna Ltd for $15 000. This plant had a

carrying amount in the records of Brim Ltd of $14 000 at time of sale. This type of plant is depreciated at 10% p.a. on cost.

(d) On 1 January 2015, Tuna Ltd sold an item of inventory to Brim Ltd for $18 000. Theinventory had cost Tuna Ltd $16 000. This item was classified by Brim Ltd as plant. Plant of this type is depreciated by Brim Ltd at 20% p.a.

(e) On 1 March 2017, Brim Ltd sold an item of plant to Tuna Ltd. Whereas Brim Ltd classified this as plant, Tuna Ltd classified it as inventory. The sales price was $9000 which included a profit to Brim Ltd of $1500. Tuna Ltd sold this to another entity on 31 March for $9900.

(f) The tax rate is 30%.

At 30 June 2017, the following financial information was provided by the two companies:

Tuna Ltd Brim Ltd

Dr Cr Dr Cr

Sales revenue 64500 78000

Cost of sales 30900 46350

Trading expenses 4800 9000

Office expenses 7950 4050

Depreciation expenses 1800 3900

Proceeds on sale of plant 9000 15000

Carrying amount of plant sold 7500 14000

Income tax expense 11100 7300

Share capital 96000 66000

Retained earnings (1/7/16) 48000 31500

Current liabilities 21100 10500

Deferred tax liability 11000 15000

Plant 57000 107250

Accumulated depreciation - plant 18300 33450

Intangibles 12000 11100

Deferred tax assets 8100 9450

Shares in Brim Ltd 90000 0

Inventory 28500 24600

Receivables 8250 12450

267900 267900 249450 249450

Required;

Prepare consolidation journal entries for Tuna Ltd