On 1 July 2018, Red Ltd acquired 60% of Bill Ltd's share capital for $500,000. At acquisition date, Bill Ltd's equity consisted of:

Share capital $620,000

Retained earnings 140,000

General reserve 30,000

At acquisition date, all the identifiable assets and liabilities of Bill Ltd were recorded at amounts equal to fair value, except for a quantity of inventory whose fair value was $20,000 higher than its carrying amount. Additional information relating to the year ended 30 June 2019:

Bill Ltd recorded an after tax profit of $25,000.

The re-valued inventory was sold to an external party.

Bill Ltd declared a dividend of $28,000. The dividends are from post-acquisition earnings and revenue is recognised on declaration.

During the year Bill Ltd sold inventory to Red Ltd for $16,000, recording a profit before tax of $5,000. By 30 June 2019, 25% of the inventory remained unsold by Red Ltd.

The tax rate is 30%.

1. Prepare an acquisition analysis as at date of acquisition using the partial goodwill method.

2. Prepare all journal entries required for consolidation purposes at 30 June 2019.