On 1 January 2020, P Co acquired 90% of S Co's equity interests for $1,350,000 when the financial statement for S Co was as follows: Note (1) (2) (3) Equipment Inventory Accounts receivable Other assets Accounts payable Contingent liabilities Total net assets Book value $ 480,000 250,000 205,000 22,000 (57,000) Fair value $ 600,000 300,000 185,000 22,000 (57,000) (8,000 1,042,000 (4) 4 900,000 Share capital Retained earnings 500,000 400,000 900,000 Notes: (1) The undervalued equipment had an estimated useful life of ten years at acquisition date. (2) The undervalued inventory of S Co at acquisition date was sold to third parties in January 2021. (3) At acquisition date, S Co had not made a provision for impairment loss of $20,000 of accounts receivable on one of its debtors, Company Z. P Co, on acquisition of S Co, had made the provision in its consolidate financial statements in accordance with the acquisition method in IFRS 3. On 31 December 2021, the evidence confirmed that there was an actual impairment loss of $20,000 on the amount due from Company Z. S Co then made the appropriate adjustments. (4) The contingent liability of $8,000 in respect of claims from a customer and was paid off and recognized as expenses by S Co in December 2022. (5) Goodwill was impaired as follows: 20% of the original goodwill was deemed impaired and written off in 2021. 5% of the original goodwill was written off in 2022. (6) Fair value of non-controlling interests as at date of acquisition was $150,000. S Co purchased equipment on 1 January 2016. The estimated useful life at the date of purchase was ten years. On 1 July 2020, S Co transferred the equipment to P Co with details as follows: $ $ Transfer price 122,000 Original cost 200,000 Less: Accumulated depreciation (90,000 Net book value 110,000 Profit on sale 12,000 The remaining useful life of the equipment was re-estimated as six years and it had no residual value on the date of transfer. Both P Co and S Co adopt straight-line depreciation method on their fixed assets. During the years, the following intercompany sales of inventory were made: 2022 $ Sales from P Co to S Co Original cost Gross profit % unsold to third parties at year-end 2021 $ 130,000 100,000 30,000 30% 10% Sales from S Co to P Co Original cost Gross profit % unsold to third parties at year-end 45,000 36,000 9,000 20% The financial statements of P Co and S Co for the year ended 31 December 2022 are shown in the Consolidation Worksheet on Page 5-6. Required: (Ignore deferred taxes.) (b) Complete the consolidation worksheet for the year ended 31 December 2022. (18 marks) On 1 January 2020, P Co acquired 90% of S Co's equity interests for $1,350,000 when the financial statement for S Co was as follows: Note (1) (2) (3) Equipment Inventory Accounts receivable Other assets Accounts payable Contingent liabilities Total net assets Book value $ 480,000 250,000 205,000 22,000 (57,000) Fair value $ 600,000 300,000 185,000 22,000 (57,000) (8,000 1,042,000 (4) 4 900,000 Share capital Retained earnings 500,000 400,000 900,000 Notes: (1) The undervalued equipment had an estimated useful life of ten years at acquisition date. (2) The undervalued inventory of S Co at acquisition date was sold to third parties in January 2021. (3) At acquisition date, S Co had not made a provision for impairment loss of $20,000 of accounts receivable on one of its debtors, Company Z. P Co, on acquisition of S Co, had made the provision in its consolidate financial statements in accordance with the acquisition method in IFRS 3. On 31 December 2021, the evidence confirmed that there was an actual impairment loss of $20,000 on the amount due from Company Z. S Co then made the appropriate adjustments. (4) The contingent liability of $8,000 in respect of claims from a customer and was paid off and recognized as expenses by S Co in December 2022. (5) Goodwill was impaired as follows: 20% of the original goodwill was deemed impaired and written off in 2021. 5% of the original goodwill was written off in 2022. (6) Fair value of non-controlling interests as at date of acquisition was $150,000. S Co purchased equipment on 1 January 2016. The estimated useful life at the date of purchase was ten years. On 1 July 2020, S Co transferred the equipment to P Co with details as follows: $ $ Transfer price 122,000 Original cost 200,000 Less: Accumulated depreciation (90,000 Net book value 110,000 Profit on sale 12,000 The remaining useful life of the equipment was re-estimated as six years and it had no residual value on the date of transfer. Both P Co and S Co adopt straight-line depreciation method on their fixed assets. During the years, the following intercompany sales of inventory were made: 2022 $ Sales from P Co to S Co Original cost Gross profit % unsold to third parties at year-end 2021 $ 130,000 100,000 30,000 30% 10% Sales from S Co to P Co Original cost Gross profit % unsold to third parties at year-end 45,000 36,000 9,000 20% The financial statements of P Co and S Co for the year ended 31 December 2022 are shown in the Consolidation Worksheet on Page 5-6. Required: (Ignore deferred taxes.) (b) Complete the consolidation worksheet for the year ended 31 December 2022. (18 marks)