P Co acquired interests in X Co and Z 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:

Additional information

(a) The remaining useful life of the intangible asset of X Co as at the date of acquisition was five years, with negligible residual value. The recoverable amount of the intangible asset at the following dates was as follow:

(b) The undervalued inventory of Z Co was disposed as follows:

(c) On 10 November 20x5, X Co sold inventory to P Co at an invoiced price of $90,000.
The carrying amount and original cost of the inventory was $65,000. Subsequently:

(d) P Co provided loans to X Co during the first half of 20x5 for construction of equipment and subsequently to finance its operations.

Interest expense on an external loan incurred by P Co to finance the loan to X Co was as follows:

X Co applied correctly the requirements of IAS 23 Borrowing Costs. The equipment was available for use on 1 July 20x5. X Co commenced the depreciation of the equipment over a useful life of five years from 1 July 20x5. Residual value was negligible.

(e) On 1 July 20x6, P Co sold equipment to Z Co at a transfer price of $120,000.
At the date of the transfer, the following relates to the equipment:

(f) Apply a tax rate of 20% on all appropriate adjustments including fair value adjustments. Non-controlling interests are recognized at full fair value on acquisition date. Companies recognize impairment losses, if any, at the financial year-end.

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 in 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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Income Statement and Partial Statement of Changes in Equity for the Year Ended 31 December