On 1 July 2017 Miller Ltd acquired a 25% interest in Thomas Ltd for consideration of $73,000. At that date the equity of Thomas Ltd consisted of:

Share Capital 140 000

Retained Earnings 70 000

Asset Revaluation Surplus 12 000

Total 222 000

All assets and liabilities of Thomas Ltd are recorded at fair value with the exception of inventory which was held at $5,000 below its fair value. The entire inventory was sold during the 2017-2018 financial year.

The following amounts represent the profit/(loss), dividends paid and asset revaluation surplus (ARS) balance by Thomas Ltd since acquisition:

Year ending Year ending

30/6/2018 30/6/2019

$ $

Profit /(Loss) after tax 32 000 (20 000)

Dividend paid 12 000 7 000

ARS Balance 1 8 000 26 000

On 1 January 2018, Miller Ltd sold an item of equipment to Thomas Ltd for $18,000. The equipment had a cost of $30,000 and a carrying amount of $12,000 at the date of transfer. The equipment was estimated to have a further 4 years of useful life at the time of sale.

Tax rate is 30%.

Required:

Prepare the equity journals at 30 June 2018 and 30 June 2019 to account for the investment in Thomas Ltd in accordance with AASB 128, assuming Miller Ltd does not prepare consolidated financial statements. (Show calculations also)