P6.15 Consolidation Working Paper Eliminations, Intercompany Transactions, Noncontrolling Interest, IFRS Adaris Group, headquartered in the UK, owns a 70 percent interest in Adaris Malaysia. The acquisition cost was 250 million. At the date of the acquisition, 1 January 2016, Adaris Malaysias book value was 80 million, and its identifiable net assets were carried at amounts approximating fair value. Goodwill recognized for this acquisition was impaired by 30 million during the period 2016-2018. Goodwill impairment for 2019, the current year, is 10 million. The following information relates to intercompany transactions:

• In 2017, Adaris sold land with a book value of 3 million to Adaris Malaysia for 5 million. Adaris Malaysia sold the land to an outside party in 2019 for 4 million.
• Adaris sells merchandise to Adaris Malaysia at a markup of 30% on cost. Adaris Malaysias beginning inventory contains 10.4 million in merchandise acquired from Adaris. Its ending inventory contains 14.3 million in merchandise acquired from Adaris. Adaris sold merchandise priced at 180 million to Adaris Malaysia in 2019.
• On 30 June 2016, Adaris Malaysia sold equipment with a book value of 80 million to Adaris for 60 million. The equipment had a remaining life of 5 years, straightline. Adaris still holds the equipment.

It is now 31 December 2019, the end of Adaris accounting year. Adaris uses the complete equity method to account for its investment in Adaris Malaysia on its own books. Adaris also uses the IFRS alternative approach to valuing the noncontrolling interest in Adaris Malaysia. Below are the separate trial balances of Adaris Group and Adaris Malaysia at 31 December 2019.

(in thousands) Adaris Group Adaris Malaysia

Current assets 35,000 22,000

Plant assets, net 233,450 210,000

Investment in Adaris Malaysia 243,800

Liabilities (337,550) (105,000)

Capital Stock (40,000) (30,000)

Retained Earnings, beginning (125,000) (75,000)

Sales Revenue and gains (600,000) (490,000)

Equity in net income (3,700)

Cost of Goods Sold 430,000 210,000

Operating Expenses 164,000 258,000

Total 0 0

Required:

1. Calculate Adaris Groups equity in net income and the noncontrolling interest in net income for 2019.
2. Prepare a working paper to consolidate the trial balances of Adaris Group and Adaris Malaysia at 31 December 2019. Label your eliminating entries ( C ), ( I ), ( E ), ( R ), ( O ), and ( N ).
3. Present the consolidated income statement for 2019 and the consolidated balance sheet at 31 December 2019.