P Co acquired interests in X Co. The current financial statements are shown below. All figures are in dollars, unless as otherwise indicated.

Additional information

1. The remaining useful life of the intangible asset of X Co as at the date of acquisition was five years, with negligible residual value. On 31 December 20x3, the following information relates to the intangible asset.

2. On 10 November 20x3, X Co sold inventory to P Co at an invoiced price of $130,000.
The carrying amount and original cost of the inventory was $100,000. Subsequently, the inventory was:

3. On 1 July 20x4, P Co sold equipment to X Co at a transfer price of $70,000.
At the date of the transfer, the following relates to the equipment:

4. Apply a tax rate of 20% on all appropriate adjustments. Recognize tax effects on fair value adjustments.
Companies recognize impairment losses, if any, at the financial year-end.

Required

1. Prepare consolidation adjusting entries for the year ended 31 December 20x4.
2. Perform an analytical check on the balance of non-controlling interests as at 31 December 20x4.
3. Perform an analytical check on the balance of consolidated retained earnings as at 31 December 20x4.

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Income Statement and partial Statement of Changes in Equity for the year ended 31 December 20x4 Profit before tax Tax..... Profit after tax.. Dividends declared Retained profit.. Retained earnings, 1 Jan 20x4. Retained earnings, 31 Dec 20x4. P Co X Co 2,800,000 800,000 (560,000) (160,000) 2,240,000 640,000 (120,000) (40,000) 2,120,000 600,000 1,000,000 520,000 3,120,000 1,120,000