P Co acquired interests in Silver Co and Amber Co. Their current financial statements are shown below. All figures are in $ unless as otherwise indicated.

Fair and book values of identifiable net assets of each company as at date of acquisition were as follows:

Additional information

(a) Remaining useful life of undervalued fixed assets of Silver Co as at 1 January 20x3 was 20 years. Residual value was negligible. Recoverable amount of the fixed assets as at 31 December 20x6 was $135,000.

(b) On 1 July 20x5, Silver Co transferred inventory to Prism Co as follows:

Sixty percent of the inventory was unsold as at 31 December 20x5 and 15% of the original batch was unsold as at 31 December 20x6.

(c) From 1 July 20x5 to 30 June 20x6, Prism Co constructed an extension of a building for Silver Co at total contract price of $600,000. Prism Co recognized the following revenue and expense from the contract with Silver Co as follows:

The contract was completed on 30 June 20x6 and Silver had recognized the progress billings.
The extension of the building had a useful life of 20 years from 1 July 20x6.

(d) The intangible asset of Amber Co had an estimated useful life of 30 years as at date of investment by Prism Co.

(e) Amber Co sold excess inventory to Prism Co during 20x6 at transfer price of $100,000 when the carrying amount (original cost) was $120,000 and the fair value was $110,000.
Subsequently:

(f) Assume a tax rate of 20%.
(g) Non-controlling interests are measured at full fair value at acquisition date.

Required

1. Prepare consolidation adjusting entries for the year ended 31 December 20x6, with narratives (brief headers) in accordance with IFRS 3 and IFRS 10.
2. Prepare equity accounting entries for the year ended 31 December 20x6, with narratives (brief headers) in accordance with IAS 28.
3. Perform an analytical check on the balance of non-controlling interests as at 31 December 20x6.
4. Perform an analytical check on the balance of the investment in associate account as at 31 December 20x6.
5. Perform an analytical check on the consolidated retained earnings as at 31 December 20x6.

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Profit before tax. Tax.. Profit after tax. Income Statement and Partial Statement of Changes in Equity for the Year Ended 31 December 20x6 Dividends declared. Retained profit... Retained earnings, 1 Jan 20x6. Retained earnings, 31 Dec 20x6. Prism Co Silver Co Amber Co 1,320,000 1,150,000 1,360,000 (264,000) (230,000) (272,000) 1,056,000 920,000 1,088,000 (50,000) (75,000) (100,000) 1,006,000 845,000 988,000 500,000 480,000 510,000 1,506,000 1,325,000 1,498,000