Please answer the question clearly step by step, if there is a handwritten answer on paper, write it so it can be viewed clearly.

You have been auditing the consolidated financial statements of Reynolds Ltd and its wholly owned subsidiary Fisher Ltd. You discover that Reynolds Ltd had bought inventory during the year for $33,750 which it subsequently sold to Fisher Ltd for $40,500. Later in the year one third of the inventory was sold by Fisher Ltd to a non-group company for $16,500. The accountant's consolidation worksheet had recorded the following adjusting journal entries: Required a. Discuss whether the entries suggested by the chief accountant are correct, explaining on a lineby-line basis the adjustment entries. b. Determine the consolidation worksheet entries in the following year, assuming the inventories are on-sold, and explain the adjustments on a line-by-line basis