(Same Question) (C) During the previous year of 30 June 2019, Sydney Ltd sold inventory to Melbourne Ltd for $ 10,000, recording a before - tax profit of $ 4,000. On 1 July 2019, 50% of this inventory was still on hand with Melbourne Ltd.(d) On 1st June 2020, Sydney Ltd sold inventory to Melbourne Ltd for $ 20,000 cash. The original cost of this inventory to Sydney is $ 15,000. All of the inventory was remain unsold at 30 June 2020.

QUESTIONS 4: CONSOLIDATION WORKSHEET ENTRIES (25 MARKS) Sydney Lid incorporated the subsidiary Melbourne Led by contributing $800,000 for all the 400,000 issued shares. Prepare the journal entries for the consolidation worksheet for 30 June 2020. Details of intra-group transactions that are relevant to the consolidation for 30 June 2020 are as follows: Assume an income tax rate of 30%. (a) Melbourne Ltd pays an annual renting fee of $10,000 to Sydney Ltd at 30 June each year. ANSWER: 2 Marks (b) On 25 June 2020, Sydney Ltd declared a final dividend of $8,000, on the same date Mel- bourne declared a final dividend of $5,000 ANSWER: 4 Marks