The financial statements of P Co, Y Co, Z Co, and W Co for the year ended 31 December 20x5 are shown below:

Additional information

(a) Amortization of fair value adjustments:
(i) Undervalued inventory at date of acquisition was disposed of in January 20x4.
(ii) The intangible asset had a useful life of five years from acquisition date.

(b) Z Co transferred its fixed asset to P Co on 1 July 20x5. Details are as follows:

(c) Other transactions were as follows:

(d) Sale of inventory from P Co to Y Co in 20x5:

(e) Assume a tax rate of 20%. Recognize tax effects on fair value adjustments.

Required
1. Prepare the consolidation and equity accounting entries for 20x5.
2. Prepare the consolidation worksheet.
3. Perform an analytical check on the year-end balances of non-controlling interests in Y and W and the Investment in Z.

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Profit before tax. Tax. Profit after tax. Retained earnings, 1 January 20x5. Dividends declared Retained earnings, 31 December 20x5. Fixed assets, net book value.. Investment in Y Co, at cost Investment in Z Co, at cost. Investment in W Co, at cost. Inventory.. Intercompany receivable.. Accounts receivable Cash..... Income Statement For the Year Ended 31 December 20x5 Accounts payable.. Intercompany payable. Share capital... Retained earnings Revaluation reserves. P Co $2,400,000) (480,000) $1,920,000 1,450,000 (500,000) $2,870,000 Statement of Financial Position As at 31 December 20x5 P Co $3,000,000 2,000,000 1,200,000 960,000 500,000 120,000 $7,780,000 $2,660,000 250,000 2,000,000 2,870,000 Y Co $1,200,000 (240,000) $ 960,000 900,000 (100,000) $1,760,000 $7,780,000 Y Co $2,120,000 1,500,000 500,000 250,000 1,000,000 1,760,000 Z Co $600,000 (150,000) $4,870,000 $450,000 600,000 (80,000) $970,000 Z Co $ 750,000 450,000 50,000 $4,870,000 $1,390,000 $2,110,000 300,000 250,000 90,000 $ 20,000 400,000 970,000 $1,390,000 W Co $ 480,000 (96,000) $ 384,000 900,000 (100,000) $1,184,000 W Co $1,900,000 500,000 350,000 100,000 $2,850,000 $ 366,000 800,000 1,184,000 500,000 $2,850,000