P4.4 Consolidation and analytical check on non-controlling interests On 1 January 20x4, P Co acquired 90% of S Co. Details of S Co as at the date of acquisition are as follows: Share capital......... $1,000,000 Retained earnings as at 1 January 20x4... 150,000 $1,150,000 200.000 100005 30 Fair value was different from book value of the following assets of S Co: 00.000 B00001? : 2 IG: CS6 87. 300 Fair value Book value Fixed assets... $900,000 $800,000 tontent of Changes ja Equity Remaining useful life for the fixed assets as at acquisition date was five years and residual value of the fixed assets was zero. Fair value of non-controlling interests as at acquisition date was $345,000. The linancial statements of P Co and S Co for the year ended 31 December 20x5 are shown below. Assume a fax rate of 20% throughout. Jamesore it better sels mol amin besta fotodidlovassa esi 325714 Elastot DOW consen 11 Income Statement and Partial Statement of Changes in Equity For Year Ended 31 December 20x5 P CO SCO Sales $10,000,000 $3,500,000 Cost of sales... (7,820,000) (1,200,000) Gross profit.. $ 2,180,000 $2,300,000 Operating expenses (800,000) (560,000) Operating profit.. $ 1,380,000 $1,740,000 Dividend income from S.. 54,000 Interest Income - S and bank. 100,000 Interest expense to P... (90,000) Profit before tax....................... $ 1,534,000 $1,650,000 Tax at 20% ... (306,800) (330,000) Profit after tax. $ 1,227,200 $1,320,000 Dividends declared. (120,000) (60,000) Profit retained. $ 1,107,200 $1,260,000 Retained earnings, 1 January ...... 1,300,000 400,000 Retained earnings, 31 December $ 2,407,200 $1,660,000 S Co Statement of Financial Position As at 31 December 20x5 P Co Investment in Sco $ 3,200,000 Fixed assets.. 4,500,000 Loan receivable from 5 Co. 500,000 Inventory.... 1,250,000 Accounts receivable 1,300,000 Other receivables 200,000 Cash..... 320,000 $11,270,000 Share capital... $ 3,000,000 Retained earnings 2,407,200 Loan payable to P. Accounts payable... 5,742,800 Other payables. 120,000 $11,270,000 $2,000,000 670,000 500,000 120,000 $3,290,000 $1,000,000 1,660,000 500.000 80,000 50,000 $3,290,000 1. Prepare the consolidation adjustments for the year ended 31 December 20x5. 2. Prepare the consolidated income statement and statement of changes in equity for the year ended 31 December 20x5, and the consolidated statement of financial position as of 31 December 20x5