Assume the same facts as in P4.5, except that P Co elects to measure non-controlling interests as a proportion of identifiable net assets.

Required:

1. Prepare the consolidation adjusting entries for the year ended 31 December 20x3. Tax rate was 20%. Recognize tax effects on fair value differentials.

2. Perform an analytical check on the balance of non-controlling interests as of 31 December 20x3.

Data from p4.5

P Co acquired control of Jasper Co through acquisition of 90% in the voting rights of Jasper Co on 1 July 20x2. A cash transfer of $2,000,000 was made to the former owners of Jasper Co. P Co elects to measure non-controlling interests at fair value on acquisition date. The fair value of non-controlling interests on 1 July 20x2 was $200,000.
The shareholders’ equity of Jasper Co at acquisition date is as follows:

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Share capital.. Retained earnings. Revaluation reserves $ 500,000 450,000 100,000 $1,050,000 The fair and book values of identifiable net assets of Jasper Co at acquisition date is shown below: