Paper Ltd acquired 100% of the issued shares (cum dividend) of Pencil Ltd on 1 January 2019 for consideration of $470,000. Paper Ltd has recorded goodwill on consolidation of $45,000.

The following transactions occurred for the year ended 30 June 2021:

1. At 30 June 2020, assets of Pencil Ltd included inventory sold to it by Paper Ltd for a before-tax profit of $500. These items remain on hand during the 202021 year.

2. During the 202021 year, Pencil Ltd had sold inventory to Paper Ltd for $60,000. Pencil Ltd has recorded profit at 25% mark up on selling price. At 30 June 2021, Paper Ltd still had a quarter of this inventory on hand.

3. On 2 January 2021, Pencil Ltd sold a vehicle to Paper Ltd for $45,000. The vehicle was purchased by Pencil Ltd on 1 July 2020 at $50,000. Paper Ltd regards the vehicle as an inventory, and sold it to its customer for $65,000 on 1 June 2021.

4. Pencil Ltd has revalued its land to the fair value on 1 January 2021 and charged the amount of $14,000 to the Asset Revaluation Surplus.

5. Paper Ltd provided Pencil Ltd with 8% $100,000 loan payable on 1 January 2021. The principal repayment is scheduled on the basis of eight (8) equal payments commencing on 1 July 2021. Interest on the loan is to be paid together with the principal repayment.

(f) Financial information provided by Pencil Ltd concerning events affecting it during the 202021 year was as follows:

Profit for the year	$23,400
Retained earnings at 1 July 2020	40,000
Transfer to General Reserve	(10,000)
	53,400
Dividends paid	(12,000)
Dividends declared	(6,000)
Retained earnings at 30 June 2021	$35,400

(g) Both companies depreciate their non-current assets using a straight line method at 10% p.a.

(h) The tax rate is 30%.

Required

Prepare the consolidation worksheet entries for the preparation of the consolidated financial statements of Pencil Ltd at 30 June 2021 in accordance to IFRS 3/ AASB 3 and IFRS 10/ AASB 10. Show all workings. Narrations for the journal entries are required.