Entity P2 acquired 100% shareholding of subsidiary S2 with consideration S$5.6 million on 1 January 2017. Entity P2 functional currency and presentation currency is Singapore dollars (S$). Entity S2 functional currency is US dollars (US$).

On 1 January 2017, subsidiary S2 had share capital of US$1 million and retained earnings of US$1.3 million. The fair value of building was US$1.8 million while its carrying amount was US$1 million on 1 January 2017. The remaining useful life of the building was 20 years, with zero residual value. The fair values of other assets and liabilities are close to their carrying amounts.

US$/S$ exchange rates are 1.43 on 1 January 2017 and 1.49 on 31 December 2017. Tax rate is 20%.

Required:

Record the consolidation journal entries for P2 on 31 December 2017.

Answer rating: 100% (QA)

P2 will prepare the consolidation journal entries on 31 Decembe... View the full answer