Question Five Hobart acquired a 100 percent (100%) interest in Melbourne Ltd on 1 July 2020. The following information relates to the financial year ended 30 June 2022. The tax rate is 30 percent (30%). Intragroup sales of inventory: Melbourne Ltd sold $82 000 of inventory to Hobart Ltd. The opening inventory of Hobart Ltd on 1 July 2021 included inventory acquired from Melbourne Ltd for $22 000 that cost Melbourne Ltd $17 000 to produce. The closing inventory of Hobart Ltd includes inventory acquired from Melbourne Ltd at a cost of $51 000, which cost Melbourne Ltd $47 000 to produce. o Intragroup sale of assets: On 1 July 2021 Hobart Ltd sold an item of equipment to Melbourne Ltd for $825 000. The carrying amount of equipment in Hobart Ltd's accounts was $800 000 (cost of equipment was $1 200 000, accumulated depreciation $400 000 after two years). The equipment is assessed as having a remaining useful life of four years. The Group has a policy of measuring property, plant, and equipment using the cost model'. The group uses the straight-line method of depreciation. REQUIRED a. Provide all journal entries related to intercompany sales (9 marks) b. Provide all journal entries related to the intragroup sale of the asset. (9 marks) c. Provide justification explaining where the consolidation adjustments are recorded before preparing the end of the financial year consolidated financial statements. Are the entries recorded in the books of accounts of the subsidiaries or the parent entity or neither of them? (3 marks) [Total 21 marks] Question Five Hobart acquired a 100 percent (100%) interest in Melbourne Ltd on 1 July 2020. The following information relates to the financial year ended 30 June 2022. The tax rate is 30 percent (30%). Intragroup sales of inventory: Melbourne Ltd sold $82 000 of inventory to Hobart Ltd. The opening inventory of Hobart Ltd on 1 July 2021 included inventory acquired from Melbourne Ltd for $22 000 that cost Melbourne Ltd $17 000 to produce. The closing inventory of Hobart Ltd includes inventory acquired from Melbourne Ltd at a cost of $51 000, which cost Melbourne Ltd $47 000 to produce. o Intragroup sale of assets: On 1 July 2021 Hobart Ltd sold an item of equipment to Melbourne Ltd for $825 000. The carrying amount of equipment in Hobart Ltd's accounts was $800 000 (cost of equipment was $1 200 000, accumulated depreciation $400 000 after two years). The equipment is assessed as having a remaining useful life of four years. The Group has a policy of measuring property, plant, and equipment using the cost model'. The group uses the straight-line method of depreciation. REQUIRED a. Provide all journal entries related to intercompany sales (9 marks) b. Provide all journal entries related to the intragroup sale of the asset. (9 marks) c. Provide justification explaining where the consolidation adjustments are recorded before preparing the end of the financial year consolidated financial statements. Are the entries recorded in the books of accounts of the subsidiaries or the parent entity or neither of them? (3 marks) [Total 21 marks]