Question 6 (12 marks) On 1 July 2018, Corona Ltd acquires 20% of the issued capital of Iris Ltd for a cash consideration of $300 000. The directors of Corona Ltd believe this investment represents significant influence over the investee. The equity of Iris Ltd at the acquisition date was: Share Capital 160 000 Revaluation Surplus 220 000 Retained Earnings 320 000 All identifiable assets and Liabilities of Iris Ltd were recorded at fair values. For the period ended 30 June 2019, Iris Ltd: 1. Recorded a profit of $130 000 with an income tax expense of $30,000. 2. Paid its shareholders a total of $50,000 in dividends. During the financial period ending 30 June 2020 Iris Ltd: 1. recorded a loss of $50,000 and therefore paid no income tax and no dividends. Required Prepare journal entries in the records of Corona Ltd for each of the years ended 30 June 2019 to 2020 in relation to its investment in the associate, Iris Ltd. (Assume Corona Ltd also owns 100 % shares in Vaccine Ltd, a subsidiary entity). Question 7 (8 marks) Barry Ltd and Jones Ltd decided to jointly undertake the manufacture of an electric car. They jointly formed Silver Ltd, which will manufacture the car. Barry Ltd and Jones Ltd provide the various resources for the manufacture of the car, which is assembled by Silver Ltd. Barry Ltd and Jones Ltd each hold 50% of the voting rights in Silver Ltd and receive 50% of the cars produced by Silver Ltd. Barry Ltd and Jones Ltd then sell the cars in their own geographic region. The constitution of Silver Ltd requires that the operations of the company must be in accordance with a business plan prepared annually, and to which both Barry Ltd and Jones Ltd both agree. Silver Ltd has six directors, with three being appointed by Barry Ltd and three by Jones Ltd. Required Evaluate whether a joint arrangement exists and support your answer with justifications