Prism Co has “control” over Silver Co and “significant influence” over Amber Co. The financial statements for 20x6 are shown below. All figures are in dollars, except otherwise indicated.

Additional information:

(a) As at acquisition date, Silver Co had intangible assets that had remaining useful life of 20 years. On 31 December 20x5, new information arose:

(b) On 31 December 20x4, Silver Co, as a contractor, transferred a completed refrigerated storeroom to Prism Co.
The construction began on 1 March 20x4 and Silver Co had recognized revenue of $240,000 and profit of $40,000 during 20x4. The economic useful life of the storeroom was ten years from 1 January 20x5. Residual value was negligible. The construction work-in-progress and the progress billings accounts were closed on 31 December 20x4

(c) During December 20x6, Prism Co sold excess inventory to Silver Co as follows:

(d) Environmental damages as of acquisition date were settled and expensed by Amber Co as follows:

(e) During 20x5, Amber Co sold inventory to Prism Co as follows:

(f) Prism Co recognizes non-controlling interests at full fair value at acquisition date. Apply a tax rate of 20% on all appropriate adjustments, including fair value adjustments. The legal entities recognize impairment losses, if any, at the end of each reporting period.

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 consolidated retained earnings as at 31 December 20x6.

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Income Statement and Partial Statement of Changes in Equity Profit before tax.. Tax.. Profit after tax. Dividends declared. Retained profit.. Retained earnings, 1 Jan 20x6 Retained earnings, 31 Dec 20x6. Amber Co Prism Co Silver Co $1,890,000 $1,300,000 $1,800,000 (378,000) (260,000) (378,000) $1,512,000 $1,040,000 $1,422,000 (50,000) (100,000) (120,000) $1,462,000 $940,000 $1,302,000 890,000 600,000 900,000 $2,352,000 $1,540,000 $2,202,000