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

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:

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).

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Profit before tax Tax Profit after tax Income to NCI Dividends declared Profit retained Retained earnings, 1 Jan 20x6 Retained earnings, 31 Dec 20x6 Intercompany receivable Other net assets Cash Income Statement for year ended 31 December 20x6 P Co B Co D Co 4,377,000 1,558,000 677,000 (875,400) (311,600) (135,400) 3,501,600 1,246,400 541,600 391,200 Goodwill Intangible assets, net book value Fixed assets, net book value Investment in B Co Investment in D Co Investment in C Co Inventory Accounts payable Bank loans Intercompany payable Share capital Retained earnings Revaluation reserves Non-controlling interests (200,000) (130,000) (50,000) 3,301,600 1,116,400 491,600 2,416,000 850,900 876,600 5,717,600 1,967,300 1,368,200 Statement of Financial Position as at 31 December 20x6 P Co B Co D Co 2,844,000 3,500,000 800,000 2,063,000 4,050,400 1,400,000 1,459,000 820,000 610,000 510,000 820,000 1,800,000 2,384,000 1,382,000 815,450 320,000 700,000 150,000 12,468,000 5,575,000 2,934,450 C Co 489,000 (97,800) (80,000) 311,200 453,200 764,400 12,468,000 5,575,000 2,934,450 C Co 898,000 267,000 535,000 127,000 1,827,000 207,700 766,250 382,600 1,800,000 1,300,000 1,600,000 800,000 550,000 5,717,600 1,967,300 1,368,200 764,400 130,000 1,827,000 Consolidated Consolidated