On 30 June 2017, P Ltd purchased 100% of the shares of S Ltd for $2,870,000 cash.

At the date of acquisition, S Ltd's Statement of Financial Position was as follows:

Statement of Financial Position of S Ltd as at 30 June 2017

AssetsLiabilities

Cash109,000Accounts Payable316,000

Accounts Receivable364,000Bank Loans1,614,000

Inventory437,000Deferred Tax Liabilities180,000

Land2,000,000Shareholder's Equity

Plant and Equipment1,650,000Share Capital1,200,000

(Accumulated Depreciation)(330,000)Revaluation Surplus420,000

.Retained Profits500,000

Total Assets4,230,000Total Equities4,230,000

Additional Information:

a)On 30 June 2017, all the identifiable net assets of S Ltd were considered to be recorded at fair value in S Ltd's statement of financial position, except land, which had a fair value of $2,400,000.The land has not been revalued in S Ltd's accounts.

b)On 30 June 2019, the recoverable amount of goodwill, relating to the purchase of S Ltd by P Ltd, was assessed to be $390,000.On 30 June 2020, the recoverable amount of goodwill, relating to the purchase of S Ltd by P Ltd, was assessed to be $245,000.

c)During the 2019-2020 financial year, P Ltd provided management services to S Ltd for $63,000.

d)On 1 November 2019, P Ltd leased surplus office space in its building to S Ltd, at a rental of $12,000 per month.Rent is payable half-yearly in advance, on 1 November and 1 May each year

e)During the 2019-2020 financial year, S Ltd sold goods to P Ltd for $1,160,000.These goods had originally cost S Ltd $860,000.On 30 June 2020, 10% of these goods remained in P Ltd's closing inventory.

f)On 30 June 2020, P Ltd still owed S Ltd $107,000 for the inventory purchases.

g)On 1 July 2019, P Ltd's opening inventory includes goods purchased from S Ltd for $580,000.These goods had originally cost S Ltd $410,000.

h)On 1 July 2019, P Ltd sold plant and equipment to S Ltd for $510,000.P Ltd had originally purchased the plant and equipment for $750,000 on 1 July 2015.The original estimated useful life of the plant and equipment was 10 years.

i)The income tax rate is 30%.

Statements of Profit or Loss of P Ltd and S Ltd for the year ended 30 June 2020

P LtdS Ltd

Sales7,320,0004,890,000

Cost of Goods Sold5,270,0003,510,000

Gross Profit2,050,0001,380,000

Depreciation Expense208,000250,000

Borrowing Cost Expense247,000137,000

Administration Expenses1,164,000553,000

Management Fee Income63,000-

Rental Revenue96,000-

Dividend Revenue160,000-

Gain on Sale of Plant and Equipment60,000-

Profit before Income Tax Expense810,000440,000

Income Tax Expense243,000132,000

Profit after Income Tax Expense567,000308,000

Statements of Changes in Equity of P Ltd and S Ltd for the year ended 30 June 2020 [Extract]

P LtdS Ltd

Retained Profits 1/7/191,143,000742,000

Profit after Income Tax Expense567,000308,000

Interim Dividend Paid135,00072,000

Final Dividend Declared155,00088,000

Retained Profits 30/6/201,420,000890,000

Statements of Financial Position of P Ltd and S Ltd as at 30 June 2020

P LtdS Ltd

Assets

Cash281,000227,000

Accounts Receivable671,000436,000

Dividends Receivable88,000-

Prepaid Rental Expense-48,000

Inventory708,000579,000

Land2,170,0002,000,000

Buildings1,800,000-

Accumulated Depreciation(360,000)-

Plant and Equipment1,480,0002,160,000

Accumulated Depreciation(888,000)(910,000)

Investment in S Ltd2,870,000-

Total Assets8,820,0004,540,000

Liabilities

Accounts Payable538,000337,000

Dividends Payable155,00088,000

Rental Revenue Received in Advance48,000-

Bank Loans2,539,0001,425,000

Deferred Tax Liabilities336,000180,000

Shareholder's Equity

Share Capital3,000,0001,200,000

Revaluation Surplus784,000420,000

Retained Profits 30/6/201,420,000890,000

Total Equities8,820,0004,540,000

Required:

Prepare the Consolidation Worksheet Journal entries for the financial year ended 30 June 2020.Show all workings necessary to derive your answer.