1. On 1 Jan 2017 Luigi Ltd sold inventory to Mario Ltd costing $27,000 for $38,000. One quarter of this inventory was still on hand as at 30/6/17. 2. On 1 Jan 2016 Luigi Ltd sold inventory costing $4700 to Mario Ltd for $8000. Mario Ltd treats the item as equipment and depreciates it at 10% per annum. 3.On 1 July 2016 Luigi sold plant to Mario for $7,000. The plant had cost Luigi $8,000 on 1 July 2014 and it was being depreciated at 10% per annum. Mario regards the plant as inventory. The inventory was all sold by 30th July 2016. 4. At 1 July 2016 Luigi Ltd held inventory that it had purchased from Mario Ltd on 1 June 2016 at a profit of $8000. All inventory was sold by 30 June 2017 5. Mario Ltd accrues dividends from Luigi Ltd once they are declared. 6. Mario Ltd has earned $1200 in interest revenue in the 2017 financial year from Luigi Ltd. 7. Mario Ltd has earned $2400 in service revenue in the 2017 financial year from Luigi Ltd.
8. Assume a tax rate of 30%.
Prepare the consolidation worksheet journal entries to eliminate the effects of inter‐entity transactions as at 30 June 2017.
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