On 1 July 2016 Ryu Ltd acquired 100% of the share capital (cum div.) of Ken Ltd for $480,000. At that date, the relevant balances in the records of Ken Ltd were: $ Share capital 310 000 General reserve 25 000 Retained earnings Dividend payable 90 000 10 000 At the date of acquisition all assets and liabilities of Ken Ltd were recorded in the accounting records at amounts equal to their fair values with the exception of the following assets: Carrying amount Fair value $ $ Land 40 000 48 000 Equipment 22 000 32 000 The land was sold in January 2018 for $55,000. The cost of the equipment was $40,000 and had a further useful life of four (4) years at the date of acquisition. Ken Ltd had reported a contingent liability at 1 July 2016 in the notes to the financial statements in relation to claims by customers for damaged goods. Ryu Ltd placed a fair value of $9,000 on these claims at acquisition date. These claims were subsequently settled in October 2018 for $5,000. Additional information: a) On 1 July 2018, Ken Ltd held inventories that had been sold to it by Ryu Ltd in the previous year for $20,000, at a mark-up of 25%. The inventory was sold to external parties by 31 December 2018. b) On 1 December 2018, Ryu Ltd purchased inventory from Ken Ltd for $18,000, recording a before-tax profit of $6,000. By 30 June 2019, Ryu Ltd sold two-third of these to external entities for $15,000. c) On 1 January 2017, Ken Ltd sold an item of plant to Ryu Ltd for $32,000. The original cost to Ken Ltd was $50,000 and had a carrying amount at the time of sale of $30,000. Plant is depreciated at 25% p.a. by both parties. d) All transfers from retained earnings to the general reserve by Ken Ltd were from post acquisition earnings. e) During the 2017-2018 financial year, an impairment test was conducted and resulted in the recognition of impairment losses for goodwill of $5,000 on consolidation. f) On realisation of the business combination valuation reserve, a transfer is made to retained earnings on consolidation. g) The tax rate is 30%.

The financial statements of the two companies at 30 June 2019 are as follows: Ryu $ Ken $ Revenues 830 000 450 000 Expenses (620 000) (330 000) Net profit before tax 210 000 120 000 Income tax expense (70 000) (40 000) Net profit after tax 140 000 80 000 Retained earnings 1 July 2018 150 000 125 000 290 000 205 000 Dividend paid (40 000) (20 000) Transfer to general reserve (10 000) (9 000) Retained earnings 30 June 2019 240 000 176 000 Share capital 430 000 310 000 General reserve 50 000 48 000 Loan payable 40 000 Deferred tax liabilities Other liabilities 15 000 95 000 4 000 26 000 TOTAL EQUITY AND LIABILITIES 870 000 564 000 Cash 120 000 150 000 Accounts receivable Inventory 65 000 60 000 47 000 Deferred tax assets Loan receivable 16 000 11 000 40 000 Investment in Ken Ltd 470 000 Non-current assets 139 000 316 000 TOTAL ASSETS 870 000 564 000

Required: Prepare the consolidation journal entries for the Ryu Ltd group for the year ended 30 June 2019. (Show all workings where necessary).