P Co acquired an ownership interest of 90% in X Co and obtained control on 1 January 20x3.

On acquisition date, the fair value of fixed assets of X Co was $1,400,000 while the book value of fixed assets was $1,000,000. Fixed assets had a useful life of ten years as at the date of acquisition. The fixed assets were disposed at a price of $300,000 to third parties on 1 January 20x6.
Fair value of non-controlling interests of X Co as at acquisition date was $180,000. The financial statements for the year ended 31 December 20x6 are shown below.

Required:
1. Prepare consolidation entries for the year ended 31 December 20x6.
2. Perform an analytical check on the balance in non-controlling interests as at 31 December 20x6, showing the workings clearly.

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Shareholders' equity of X Co at date of acquisition was as follows: Share capital.... Retained earnings. $600,000 600,000 $1,200,000