On 1 July 2019 Blue Ltd acquired 100% of the share capital (ex. div.) of Purple Ltd for $717,500. At that date, the relevant balances in the records of Purple Ltd were:

	$
Share capital	520,000
General reserve	32,500
Retained earnings	130,000
Dividend payable	16,250

At the date of acquisition all assets and liabilities of Tina Ltd were recorded in the accounting records at amounts equal to their fair values with the exception of the following assets:

	Carrying amount	Fair value
	$	$
Machinery	76,375	100,750
Inventory	16,250	22,750

The cost of machine was $121,875 and had a further 5-year life as at the date of acquisition. Inventory at the acquisition date was sold in April 2020. Purple Ltd disclosed a contingent liability at the date of acquisition in relation to claims for damaged goods. Blue Ltd estimated a fair value of $26,000 on the claim. This claim was settled on 30 November 2022 for $14,625.

Additional information:

During the 2021-2022 financial year, Blue Ltd purchased inventory from Purple Ltd for $29,250. The cost of inventory to Purple Ltd was $21,125. Half of this inventory was sold by Blue Ltd to external parties by 30 June 2022. The balance was sold to external parties in December 2022.

During the 2022-2023 financial year, Blue Ltd sold inventory to Purple Ltd for $43,680 at a mark-up of 40%. By 30 June 2023, Purple Ltd still held inventory that it had bought from Blue Ltd for $13,650.

On 1 January 2021, Purple Ltd sold an item of plant to Blue Ltd for $65,000. The original cost of the plant to Purple Ltd was $84,500 and had a carrying amount at the time of sale of $52,000. The plant is considered to have a further 5 years of life as of 1 January 2021.

On 1 January 2023, Blue Ltd acquired $81,250 of debentures previously issued by Purple Ltd. The debentures were acquired on the open market for $69,875. Interest on debentures is paid half-yearly. Outstanding interest has been paid by Purple Ltd on 30 June 2023.

All transfers from retained earnings to the general reserve by Purple Ltd were from post-acquisition earnings.

On realisation of the business combination valuation reserve, a transfer is made to retained earnings on consolidation.

The tax rate is 30%.

The financial statements of the two companies on 30 June 2023 are as follows:

	Blue Ltd	Purple Ltd
	$	$
Revenues	1,381,250	893,750
Expenses	(1,072,500)	(682,500)
Net profit before tax	308,750	211,250
Income tax expense	(105,625)	(78,000)
Net profit after tax	203,125	133,250
Retained earnings 1 July 2022	260,000	195,000
	463,125	328,250
Dividend paid	(68,250)	(29,250)
Transfer to general reserve	(26,000)	(19,500)
Retained earnings 30 June 2023	368,875	279,500
Share capital	812,500	520,000
General reserve	133,250	87,750
Accounts payable	73,125	32,500
6% debentures		146,250
Other liabilities	156,000	9,750
TOTAL EQUITY AND LIABILITIES	1,543,750	1,075,750
Cash	176,250	243,750
Accounts receivable	40,625	105,625
Prepayment	48,750	97,500
Inventory	105,625	146,250
Debentures in Purple Ltd	69,875
Investment in Purple Ltd	717,500
Non-current assets	385,125	482,625
TOTAL ASSETS	1,543,750	1,075,750

Required:

Prepare the consolidation journal entries for the Blue Ltd group for the year ended 30 June 2023. Round all numbers to the nearest whole dollar. (20 marks)