Question 4 Part A- Accounting for investments in associates and joint ventures Green Ltd has a 25% interest in an associate, Blue Ltd, in which it invested $60,000 on 1 July 2019. The equity of Blue Ltd at the acquisition date was: Share capital Retained earnings $50,000 145,000 All the identifiable assets and liabilities of Blue Ltd were recorded at amounts equal to their fair values. Profits, income tax expense and dividends for the years ended 30 June 2020 and 2021 were as follows: 2020 2021 Profit before tax $31,000 (20,000) Income tax expense $12,000 Dividends paid $30,000 8,000 Green Ltd does not prepare consolidated financial statements. The following independent transactions have occurred between the two entities: In July 2020, Blue Ltd sold inventory to Green Ltd for $15,000. This inventory had previously cost Blue Ltd $10,000 and remains unsold by Green Ltd at the end of the period. In February 2021, Green Ltd sold inventory to Blue Ltd at a before-tax profit of $5,000. Half of this was sold by Blue Ltd before 30 June 2021. Required: Prepare the acquisition analysis and journal entries of Green Ltd's investment in its associate Blue Ltd for the years ended 30 June 2020 and 30 June 2021. Show all workings. (9 marks)