On 1 July 2020 Lion Ltd acquired 100% of the share capital (cum. div.) of Horse Ltd for $480,000. At that date, the relevant balances in the records of Horse Ltd were:

$Share capital297,600General reserve24,000Retained earnings86,400Dividend payable9,600

At the date of acquisition all assets and liabilities of Horse Ltd were recorded in the accounting records at amounts equal to their fair values with the exception of the following assets:

Carrying amountFair value$$Land38,40046,080Equipment21,12030,720

The land was sold on 1 March 2023 for $52,800. The cost of the Equipment was $38400 and had a further 4-year life as at the date of acquisition. Horse Ltd reported acontingent liability at 1 July 2020 in relation to claims by customers for damaged goods. Lion Ltd placed a fair value of $8,640 on these claims at acquisition date. This claim was subsequently settled on 1 December 2022 for $4,800.

Additional information:

a) On 1 July 2022, Horse Ltd held inventories that had been sold to it by Lion Ltd in the previous year for $19,200, at a mark-up of 25%. The inventory was sold to external parties by the 30 June 2023.

b) On 15 December 2022, Lion Ltd purchased inventory from Horse Ltd for $17,280, recording a before-tax profit of $5,760. By 30 June 2023, Lion Ltd sold2/3 of these to external entities for $14,400.

c) On 1 January 2021, Horse Ltd sold an item of Machine to Lion Ltd for $30,720. The original cost of the Machine to Horse Ltd was $38,400 and had a carrying amount at the time of sale of $21,120. Machines of this class is depreciated at 25% p.a.

d) All transfers from retained earnings to the general reserve by Horse Ltd were from post-acquisition earnings.

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 on 30 June 2023 are as follows:

Lion LtdHorse Ltd$$Revenues796,800432,000Expenses(595,200)(316,800)Net profit before tax201,600115,200Income tax expense(67,200)(38,400)Net profit after tax134,40076,800Retained earnings 1 July 2022144,000120,000278,400196,800Dividend paid(38,400)(19,200)Transfer to general reserve(9,600)(8,640)Retained earnings 30 June 2023230,400168,960Share capital412,800297,600General reserve48,00046,080Loan payable to Horse Ltd38,400-Deferred tax liabilities14,4003,840Other liabilities91,20024,960TOTAL EQUITY AND LIABILITIES835,200541,440Cash70,080144,000Accounts receivable62,400-Inventory57,60045,120Deferred tax assets15,36010,560Loan receivable from Lion Ltd-38,400Investment in Horse Ltd470,400-Non-current assets159,360303,360TOTAL ASSETS835,200541,440

Required:

Prepare the acquisition analysis and consolidation journal entries for the Lion Ltd group for the year ended 30 June 2023. Round all numbers to the nearest whole dollar.