The financial statements of P Co and its subsidiaries and associate are shown below: Additional information 1.

Question:

The financial statements of P Co and its subsidiaries and associate are shown below:

image text in transcribed

image text in transcribed

image text in transcribed

Additional information

1. Intangible assets of B Co had an indefinite useful life. On 31 December 20x6, the annual impairment test revealed a loss of $110,000.

2. Ninety percent of the undervalued inventory of C Co was sold to third parties during 20x5 and the remaining was written down to zero during 20x6.
3. P provided a loan to B to finance the self-construction of a warehouse. The warehouse was ready for use on 1 July 20x6 and had an estimated useful life of 10 years. The following transactions were recorded in P’s books:

image text in transcribed

4. Provision for loss of B Co was the present value of the expected loss on a claim by a third party. On 1 December 20x5, court hearings confirmed the actual loss of $100,000, which was recognized by B Co.
5. Apply a tax rate of 20% on all appropriate adjustments. Recognize tax effects on fair value adjustments.


Requirement

Prepare the consolidated financial statements for the year ended 31 December 20x6 using the end result approach through workings (i.e., analytically derive the balances without having to formulate the consolidation and equity accounting entries and worksheets).

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question
Question Posted: