Prepare consolidated journal entries and equity accounting journal entries as at 31 Dec 20x6 that P will have to pass to prepare consolidated financial statements. Narrations are required.

P Ltd acquired 85% of interest in W3 Ltd on 1 Jan 20x4.

 

1. The equity investments of W3 as at 31 Dec 20x6 were first purchased during 20x5 2. . During 20x6, W3 bought inventory from P at $100,000 (original cost to P was $55,000). 70% were resold to third parties during 20x6. 3. . On 1 Jul 20x4, W3 provided architectural services to P with respect to the construction of a warehouse by P. The warehouse was completed on 31 Dec 20x5 and put to use on 1 Jan 20x6, and has an expected useful life of 18 years, with no residual value. The following is extracted from W3's records: W3's architectural costs Invoiced to P During 20x4 $15,000 $20,000 During 20x5 $35,000 $48,000