P Co acquired Y Co and Z Co as follows:

Additional information:

(a) P Co transferred excess inventory to Y Co as follows:

(b) On 1 January 20x6, Y Co transferred its fixed asset to P Co at a transfer price of $120,000. The original cost of the fixed asset was $100,000; its accumulated depreciation at the date of transfer was $60,000. The original useful life of the fixed asset was five years, and its remaining useful life as at 1 January 20x6 was two years.
The fixed asset had zero residual value.

(c) Sale of inventory from P Co to Z Co is as follows:

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

Required
1. Prepare consolidation and equity accounting entries for the year ended 31 December 20x6, with narratives and workings.
2. Perform an analytical check on the balance in non-controlling interests and investment in associate as at 31 December 20x6, showing the workings clearly.
3. Perform an analytical check on consolidated retained earnings as at 31 December 20x6, showing workings clearly.
4. Prepare consolidation worksheets for the year ended 31 December 20x6.

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Date of acquisition.. Percentage acquired by P Co. Shareholders' equity at date of acquisition: Share capital... Retained earnings. Y Co Z Co 1 January 20x4 1 January 20x5 90% 30% $ 500,000 600,000 $1,100,000 $300,000 400,000 $700,000