P Co acquired a controlling interest in Moonstone as follows:

P Co chose to measure non-controlling interests at fair value on acquisition date. The fair value of non-controlling interests in Moonstone Co as at date of acquisition was $250,000. The financial statements of P Co and Moonstone Co are shown below:

Required:
1. Prepare the consolidation adjusting entries for the year ending 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 at 31 December 20x3.

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Interest acquired.. Date of acquisition. At acquisition date, the shareholder's equity of Moonstone Co were as follows: Share capital.. Retained earnings... Revaluation reserves. 90% 1 January 20x1 $1,200,000 550,000 120,000 $1,870,000