On 1 July 2018, Bill Ltd acquired 100% of the issued shares (cum. div.) of Thomas Ltd for $330.000. At this date, the equity of Thomas Ltd consisted of: Share capital (100,000 shares) General rese reserve Retained earnings Dividend payable $ 160,000 4,800 59,200 20,000 At the date of acquisition, all the identifiable assets and liabilities of Thomas Ltd were recorded at amounts equal to their fair values except for Plant (cost $130,000) Land Inventories Carrying amount $ 104,000 80,000 50,000 Fair value $ 112,000 90,000 56,000 The plant was expected to have a further useful life of 10 years. The land was sold on 1 January 2021. The inventories were all sold by 30 June 2019. On 1 July 2018, Thomas Ltd had unrecorded brands that had a fair value of $36,000. The brands had an indefinite life.

 Additional information 

a) Thomas Ltd had inventories on hand on 30 June 2020 that included inventories at the cost of $16.000 that had been sold to it by Bill Ltd. These inventories had cost Bill Ltd $12,000. The inventories were all sold by Thomas Ltd by 30 June 2021. 

b) During the 2020–21 year. Thomas Ltd sold inventories to Bill Ltd for $96,000. On 30 June 2021, Bill Ltd still had some of these inventories on hand. These inventories had been sold to it by Thomas Ltd at a profit of $8,000. 

c) On 1 January 2020, Thomas Ltd sold an item of plant to Bill Ltd for $32,000. The original cost of the plant to Thomas Ltd was $30,000 and had a carrying amount at the time of sale of $$24,000. Plant of this class is depreciated at 20% p.a. 

d) Management and consultation fees derived by Bill Ltd are all from Thomas Ltd and represent charges for administration of $3,520 and technical services for the manufacturing section of $4.480. 

e) On 1 July 2020. all debentures issued by Thomas Ltd are acquired by Bill Ltd. Interest on debentures is paid annually. Outstanding interest has been paid by Bill Ltd on 30 June 2021. 

f) On realization of the business combination valuation reserve, a transfer is made to retained earnings on consolidation. The tax rate is 30%. Financial information provided by the two companies for 30 June 2021 was as follows: Bill Ltd Thomas Ltd $ $ Sales revenue 505,600 352,000 Debenture interest 8,000 Management and consultation fees 8,000 Dividends 19,200 Total revenue 540,800 352,000 Cost of sales (208,000) (136,000) Manufacturing expenses (164,000) (106,000) Depreciation on plant (24,000) (24,000) Administrative expenses (24,000) (12,800) Financial expenses (17,600) (8,000) Other expenses (22,400) (19,200) Total expenses 460.000 306,000 Profit from trading 80,800 46,000 Gains on sale of non-current assets 20,000 10,000 Profit before income tax 100,800 56,000 Income tax expense (40,000) (27,200) Profit for the year 60,800 28,800 Retained earnings on 1 July 2020 80,000 112,000 140,800 140.800 Dividend paid (32,000) (24,000) Retained earnings on 30 June 2021 108,800 116,800 Share capital 480,000 160,000 General reserve 75,200 16,000 Other reserve 20,800 16,000 Debentures 320,000 160,000 Current tax liability 40,000 27,200 Deferred tax liabilities 24,000 11,200 Other current liabilities 136,000 27,200 Total equity and liabilities 1,204,800 534,400 Shares in Thomas Ltd 310,000 5% Debentures in Thomas Ltd 160,000 Plant 192,000 163,200 Accumulated depreciation (104,000) (88,000) Intangibles 121,600 88,000 Accumulated amortisation (64,000) (40,000) Deferred tax assets 117,200 48,000 Financial assets 80,000 96,000 Land 240,000 91,200 Inventories 64,000 88,000 Receivables 88,000 48,000 Cash 40,000 Total assets 1,204,800 534,400 

Required: Prepare the consolidation journal entries for the Bill Ltd group for the year ended 30 June 2021. (20 marks)