The details of acquisition of Y Co, Z Co, and W Co are shown below.

Additional information

(a) Inventory of Y Co at the date of acquisition was disposed of in 20x4 while that of W Co was disposed of in January 20x5.

(b) The intangible asset of Z Co at the date of acquisition had no definite useful life and was tested for impairment on an annual basis. Thus far, no impairment loss arose for the intangible asset.

(c) In November 20x4, Y Co transferred inventory to Z Co at an invoiced price of $200,000. The original cost of the inventory was $140,000.

(d) On 1 January 20x5, Z Co transferred its fixed asset to P Co at a transfer price of $172,000. The original cost of the fixed asset was $180,000 and its accumulated depreciation was $36,000 at the date of transfer. The original useful life of the asset was five years and the remaining life as at 1 January 20x5 was four years.

(e) Assume at tax rate of 20%. Recognize tax effects on fair value adjustments.

Required
1. Prepare the consolidation and equity accounting journal entries for P Co and its subsidiaries and associate for the year ended 31 December 20x5.
2. Perform an analytical check on the balances of non-controlling interests as at 31 December 20x5.
3. Perform an analytical check on the balance of the investment in associate account as at 31 December 20x5.
4. Prepare the consolidation worksheet for P Co and its group for the year ended 31 December 20x5.

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Date of acquisition.. Percentage acquired by P Co. Percentage acquired by Y Co.. Shareholders' equity at date of acquisition: Share capital.. Retained earnings. Inventory Intangible assets.. Other net assets.. Net identifiable assets. Y Co Book v-alue $ 220,000 1,480,000 $1,700,000 Y Co 1 January 20x3 90% Fair value $ 320,000 $ 800,000 900,000 $1,700,000 Fair value of non-controlling interests at acquisition date ..... $ 400,000 The fair and book values of net identifiable assets of each company at the date of acquisition are shown below: W Co Book value z Co $600,000 1,480,000 $1,800,000 $600,000 Z Co 1 January 20x4 30% Fair value $200,000 400,000 $600,000 W Co 1 July 20x4 Book value $100,000 60% $500,000 340,000 $840,000 $300,000 Fair value $ 90,000 $300,000 600,000 740,000 740,000 $900,000 $840,000 $830,000 The financial statements of P Co, Y Co, Z Co, and W Co for the year ended 31 December 20x5 are shown below.