Download the full version of the testbank or

solution manual at testbankbell.com

Accounting for Corporate Combinations and

Associations Australian 7th Edition Arthur
Solutions Manual

https://testbankfan.com/product/accounting-for-
corporate-combinations-and-associations-
australian-7th-edition-arthur-solutions-manual/

Explore and download more testbank or solution manual

at https://testbankfan.com
 Recommended digital products (PDF, EPUB, MOBI) that
you can download immediately if you are interested.

Accounting for Corporate Combinations and Associations

Australian 7th Edition Arthur Test Bank

https://testbankfan.com/product/accounting-for-corporate-combinations-
and-associations-australian-7th-edition-arthur-test-bank/

testbankbell.com

Accounting for Corporate Combinations and Associations

Australian 8th Edition Arthur Solutions Manual

https://testbankfan.com/product/accounting-for-corporate-combinations-
and-associations-australian-8th-edition-arthur-solutions-manual/

testbankbell.com

Accounting for Corporate Combinations and Associations

Australian 8th Edition Arthur Test Bank

https://testbankfan.com/product/accounting-for-corporate-combinations-
and-associations-australian-8th-edition-arthur-test-bank/

testbankbell.com

Macroeconomics Principles Applications and Tools 7th

Edition OSullivan Test Bank

https://testbankfan.com/product/macroeconomics-principles-
applications-and-tools-7th-edition-osullivan-test-bank/

testbankbell.com
Computer Accounting with QuickBooks Online A Cloud Based
Approach 1st Edition Yacht Solutions Manual

https://testbankfan.com/product/computer-accounting-with-quickbooks-
online-a-cloud-based-approach-1st-edition-yacht-solutions-manual/

testbankbell.com

Sociology in Our Times 9th Edition Diana Test Bank

https://testbankfan.com/product/sociology-in-our-times-9th-edition-
diana-test-bank/

testbankbell.com

Digital Media Primer 3rd Edition Wong Solutions Manual

https://testbankfan.com/product/digital-media-primer-3rd-edition-wong-
solutions-manual/

testbankbell.com

Children and Their Development Canadian 3rd Edition Kail

Test Bank

https://testbankfan.com/product/children-and-their-development-
canadian-3rd-edition-kail-test-bank/

testbankbell.com

Physical Geology 15th Edition Plummer Solutions Manual

https://testbankfan.com/product/physical-geology-15th-edition-plummer-
solutions-manual/

testbankbell.com
Maternal Child Nursing Care in Canada 1st Edition Perry
Test Bank

https://testbankfan.com/product/maternal-child-nursing-care-in-
canada-1st-edition-perry-test-bank/

testbankbell.com
Solutions Manual
Chapter 6 Partly owned subsidiaries: indirect non-controlling
interest

Question 6.1 The structure of groups (Section 6.1)

Complex groups with multiple levels of subsidiaries may exist for a number of
reasons including:

(a) to limit litigation risk for particular products or services using the benefit of
‘limited liability’ offered by the corporate form;
(b) to admit outside shareholders in order to spread the commercial risk of a
particular business;
(c) to limit sovereign risk that arises from operating in particular foreign
jurisdictions;
(d) often a foreign subsidiary must be incorporated and admit a local partner (e.g. the
government) in order to gain access to that foreign market;
(e) to facilitate business and geographical diversification;
(f) for management control and internal reporting; or
(g) as a result of mergers and acquisitions.

Question 6.2 The meaning of direct and indirect ownership interests (Section
6.2.2)

Difference between direct and indirect interests

Paragraph 4 of AASB 127 defines ‘non-controlling interest’ to mean:

“the equity in a subsidiary not attributable, directly or indirectly, to a parent”

This definition makes it clear that in consolidation accounting the interests of the
group’s owners in the equity of subsidiaries (i.e. the shareholders of the ultimate
parent entity and outside shareholders) can be direct interests or indirect interests.

A direct interest is established when the entity owners hold an investment in the
equity of a subsidiary entity. The ordinary shareholders of a subsidiary entity have the
direct interest and this interest is accompanied by the rights of membership including:

• the right to vote in a general meeting of shareholders;

• the right to a declared dividend/distribution which has been approved in
accordance with the entity’s constitution; and
• the right to participate in any surplus that results on a winding-up.

Copyright ©2012 Pearson Australia (a division of Pearson Australia Group Pty Ltd) – 1
9781442519565/Arthur/Accounting for Corporate Combinations and Associations
An indirect parent ownership interest occurs when a parent entity has a shareholding
in one subsidiary that in turn has a shareholding in another subsidiary. An indirect
interest is an equitable interest in a subsidiary that exists by virtue of a direct interest
in an intermediate subsidiary. Indirect interests usually only arise when there are
multiple layers of subsidiaries in a complex group. By contrast to a direct interest, an
indirect interest does not convey the rights of membership of an entity referred to
above. This is because the entity with an indirect interest does not hold shares in the
entity in which it has an indirect interest.

Example of parent-child-grandchild structure

PI NCI

Parent Ltd

Direct NCI
Direct PI Direct NCI
75% 25% 20%

Child Ltd

Indirect PI Indirect NCI

75% x 80% = 60% 80% 25% x 80% = 20%

Grandchild
Ltd

Copyright ©2012 Pearson Australia (a division of Pearson Australia Group Pty Ltd) – 2
9781442519565/Arthur/Accounting for Corporate Combinations and Associations
In this example, the direct and indirect interests are as follows:

• Parent Ltd and its shareholders (the PI) have a direct interest of 75% in Child Ltd.

• Child Ltd has a direct interest of 80% in Grandchild Ltd.

• Parent Ltd and its shareholders (the PI) have an indirect interest of 75% x 80% =
60% in Grandchild Ltd.

• Non-controlling interest shareholders (the NCI) have a direct interest of 25% in

Child Ltd.

• Non-controlling interest shareholders (the NCI) have a direct interest of 20% in

Grandchild Ltd.

• Non-controlling interest shareholders (the NCI) have an indirect interest of 25% x

80% = 20% in Grandchild Ltd.

The ownership interests relevant to the allocation process for the consolidation of
Parent Ltd, Child Ltd and Grandchild Ltd are summarised in the table below.

Child Grandchild
Ltd Ltd
Parent Entity interest (PI)
Direct 75% -
Indirect - 60%
Non-controlling interest (NCI)
Direct 25% 20%
Indirect - 20%
100% 100%

Note that the direct and indirect interests in a subsidiary must sum to 100%.

Indirect ownership interest is a very useful concept because it provides the means to
determine the allocation to NCI and PI when three or more entities (e.g. Parent, Child
and Grandchild) are consolidated in one multiple consolidation.

The alternative to a multiple consolidation is a sequence of consolidations beginning

with the lowest level of subsidiaries in the group. In this example, the first
consolidation would be between Child Ltd and Grandchild Ltd and the second
consolidation would be between Parent Ltd and the Child-Grandchild subgroup. You
can imagine how cumbersome the sequential consolidation method would become if
there were a chain of five levels of subsidiaries in a complex group rather than two.

Copyright ©2012 Pearson Australia (a division of Pearson Australia Group Pty Ltd) – 3
9781442519565/Arthur/Accounting for Corporate Combinations and Associations
Question 6.3 Indirect control (Section 6.2.2)

A parent entity can control another entity in a group though an indirect ownership
interest. This is quite a common situation in business and can occur when one entity
takes a controlling interest in another entity which itself is a parent entity.

The definition of control in AASB 127 is “the power to govern the financial and
operating policies of an entity so as to obtain benefits from its activities”. Note that
there is no reference to ownership interest in the definition of control. In the case
where one entity controls an entity which is itself a parent entity, indirect control will
be achieved. Note that this may be with or without an ownership interest by this
ultimate parent entity.

Question 6.4 Indirect non-controlling interest (Section 6.2.2)

The two necessary conditions for the existence of an indirect non-controlling interest
are:
(i) A parent entity’s ownership interest in subsidiary ‘S1’ is less than 100%; and
(ii) S1’s has a controlling interest in a subsidiary ‘S2’.

Note that both conditions are necessary for the existence of an indirect NCI. Where
the ultimate parent entity owns all the entity in S1 then the only NCI in S2 with be the
direct NCI (if any) as the indirect interest in S2 is entirely the interest of the ultimate
parent.

Note that if S1 does not have a subsidiary, there will not be an indirect NCI as the
group comprises just the ultimate parent and S1 and the ownership interests in S1 are
entirely direct.

It is not necessary for the ultimate parent entity to have an ownership interest in S2.
Nor is it necessary for there to be a non-controlling interest in S2. If S1 owns all the
shares in S2, the NCI in S1 will still have an indirect interest in S2.

Copyright ©2012 Pearson Australia (a division of Pearson Australia Group Pty Ltd) – 4
9781442519565/Arthur/Accounting for Corporate Combinations and Associations
Question 6.5 Calculation of ownership interests and their relevance to
consolidation accounting (Sections 6.2.4 and 6.4.2)

The purpose of this question is to consider how ownership interests are calculated and
used in a consolidation involving multiple subsidiaries. It is normally best to start by
drawing a diagram of the group to analyse the ownership interests.

V Ltd

60% 30%

X Ltd W Pty Ltd

30%

60% 25% 30%

Y Pty Ltd Z Pty Ltd

(a) Subsidiaries of V Ltd

The subsidiaries of V Ltd are as follows:

X Ltd: - V Ltd holds a direct interest of 60% giving it capacity to cast majority of
votes.

W Pty Ltd: - V Ltd holds a direct interest of 30% and also controls X Ltd’s direct
interest of 30% giving A Ltd the capacity to cast the majority of votes in W Pty Ltd.

Copyright ©2012 Pearson Australia (a division of Pearson Australia Group Pty Ltd) – 5
9781442519565/Arthur/Accounting for Corporate Combinations and Associations
Y Pty Ltd: - V Ltd controls X Ltd’s direct interest of 60% giving V Ltd the capacity to
cast the majority of votes in Y Pty Ltd.

Z Pty Ltd: - V Ltd controls both X Ltd’s direct interest of 25% and W Pty Ltd’s direct
interest of 30% giving V the capacity to cast the majority of votes in Z Pty Ltd.

Accordingly, X Ltd, W Pty Ltd, Y Pty Ltd and Z Pty Ltd are all subsidiaries of V Ltd
because V Ltd ‘controls’ more than 50% of the voting shares in each entity which
according to AASB 127.13 is presumed to demonstrate control. It should be noted that
the direct shareholdings or ownership interests held in other entities are relevant to the
question of control because they determine the level of voting power.

It is important not to confuse indirect ownership interests with control. For example,
V Ltd has an indirect ownership interest in Y Pty Ltd of 36% (i.e. 60% x 60%) but
still has control of Y Pty Ltd. The calculation of indirect ownership interests is not
made for the purpose of control judgements. Rather, the relevance of indirect
ownership interests on consolidation relates to the allocation issue, i.e. how the
equities of a group with multiple levels of subsidiaries are allocated between non-
controlling and parent interests.

(b) Ownership interests in the V Ltd Group

The ownership interests in the V Ltd Group are as follows:

X Ltd W Pty Ltd Y Pty Ltd Z Pty Ltd

PI
Direct 60% 30% - -
Indirect 18% 36% 29.4%

NCI
Direct 40% 40% 40% 45%
Indirect - 12% 24% 25.6%

Total 100% 100% 100% 100%

i. V’s ownership interest in W

Direct 30%
Indirect (through X) 60% x 30% 18%
Direct + Indirect 48%

ii. V’s ownership interest in Y

Direct -
Indirect (through X) 60% x 60% 36%
Direct + Indirect 36%

Copyright ©2012 Pearson Australia (a division of Pearson Australia Group Pty Ltd) – 6
9781442519565/Arthur/Accounting for Corporate Combinations and Associations
iii. V’s ownership interest in Z

Direct -
Indirect (through X) 60% x 25% 15%
Indirect (through W) 30% x 30% 9%
Indirect (through X &W) 60% x 30% x 30% 5.4%
Direct + Indirect 29.4%

(c) Elimination of investment assets

The acquisition analysis for an investment in a subsidiary is based on the direct

ownership interest held by the immediate parent entity. On consolidation, each
investment asset held in a subsidiary must be eliminated against the holder’s direct
interest in the subsidiary’s net assets acquired as represented by capital, retained
earnings, surpluses and reserves.

In this example, the elimination of the investment accounts in the subsidiaries will
proceed using direct interests as follows:

Immediate parent Investment in: Eliminated against

pre-acquisition equities:
V X 60% of X’s
V W 30% of W’s
X W 30% of W’s
X Y 60% of Y’s
X Z 25% of Z’s
W Z 30% of Z’s

(d) Post-acquisition profits of W Ltd attributable to the shareholders of V Ltd

On consolidation, the post-acquisition profits of a partly-owned second-level

subsidiary must be allocated to non-controlling shareholders (NCI) and, by virtue
thereof, the shareholders of the ultimate parent entity (PEI) using direct and indirect
ownership interests.

Accordingly, the shareholders of V Ltd (the PI) have an interest in the post-
acquisition profits of W Pty Ltd of 30% + 18% = 48%.

(e) Dividends of W Ltd attributable to the shareholders of V Ltd

On consolidation, the dividends of a subsidiary distributed to other members of the

group must be eliminated using the direct ownership interests that each member has in
the subsidiary, if any.

V Ltd and X Ltd both have a 30% direct interest in W Pty Ltd. Therefore, if W Pty
Ltd’s appropriations include a dividend paid of $1 million, then 60% of that dividend
($600,000) is intra-entity (i.e. within the group) and must be eliminated. As the intra-
entity component of the dividend is eliminated on consolidation, there is nothing to

Copyright ©2012 Pearson Australia (a division of Pearson Australia Group Pty Ltd) – 7
9781442519565/Arthur/Accounting for Corporate Combinations and Associations
allocate or attribute to parent entity interest in the group (i.e. the shareholders of V
Ltd). However, the remainder of the dividend ($400,000) is not eliminated and is
attributable to the direct non-controlling interest in W Pty Ltd (40%).

In consolidation accounting only direct ownership interests are relevant when dealing
with a subsidiary’s dividends. As intra-entity dividends are eliminated, only dividends
paid by a subsidiary are included in consolidated amounts. In addition, the
consolidated total will include dividends paid by the ultimate parent entity.

(f) PI and NCI in W Ltd and X Ltd

Step 1
X* = X +.3W

Step 2
W* = W + .1X

Step 3 Put step 2 into step 1

X* = X + .3(W + .1X*)
X* = X +.3W + .03X*
.97X* = X +.3W
X* = X/.97 + .3W/.97

Step 4 Put step 1 into step 2

W* = W +.1(X + .3W*)
W* = W +.1X + .03W*
.97W* = W +.1X
W* = W/.97 + .1X/.97

Step 5
NCI = .1X* + .4W*
NCI = .1(X/.97 + .3W/.97) + .4(W/.97 + .1X/.97)
NCI = .1X/.97 + .03W/.97 + .4W/.97 + .04X/.97
NCI = .14X/.97 + .43W/.97
NCI = .1443X + .4432W

PI X Ltd Y Ltd
Direct 60% 30%
Indirect 25.57% 25.68%
Total PI 85.57% 55.68%
NCI
Direct 10% 40%
Indirect 4.43% 4.32%
Total NCI 14.43% 44.32%
Total 100% 100%

Copyright ©2012 Pearson Australia (a division of Pearson Australia Group Pty Ltd) – 8
9781442519565/Arthur/Accounting for Corporate Combinations and Associations
Question 6.6 The sequential consolidation method versus the multiple
consolidation method (Sections 6.3.1 and 6.3.2)

The sequential consolidation method involves a sequence or series of consolidations

(otherwise known as sub-consolidations) starting from the bottom of the group and
working to the top. Each of the sub-consolidations is performed on a group made up
of an immediate parent entity and the entities or sub-group that it controls. The final
sub-consolidation is performed on the ultimate parent entity and the subsidiaries or
sub-groups at the first level immediately below the ultimate parent entity.

The sequential consolidation method can be illustrated by considering the following

corporate group.

W Ltd

80%

X Ltd

90%

Y Ltd

In this example, the sequential consolidation would proceed by first preparing a

consolidation worksheet for X Ltd and Y Ltd to produce consolidated financial
information for the X-Y subgroup. In a second consolidation worksheet, the
consolidated financial information of the X-Y subgroup would be combined with the
financial information of W Ltd. In preparing the two consolidations, the usual
eliminations and adjustments for intra-entity transactions and balances would apply.
For example, in the first consolidation, X Ltd’s investment in Y Ltd would be
eliminated against the pre-acquisition issued capital and reserves of Y Ltd. The
allocation of the consolidated equities under the sequential consolidation method is
based on the direct interests in the immediate parent company. In the first
consolidation, 90% of Y Ltd’s realised profits and reserves would be allocated to PI
and 10% to NCI. In the second consolidation, 80% of the realised profits and reserves
of the X-Y sub-group attributable to X Ltd would be allocated to PI and 20% to NCI.

Copyright ©2012 Pearson Australia (a division of Pearson Australia Group Pty Ltd) – 9
9781442519565/Arthur/Accounting for Corporate Combinations and Associations
By contrast to the sequential consolidation method, the multiple consolidation method
involves only one consolidation worksheet that includes the eliminations and
adjustments for any intra-entity transactions and balances between all members of the
group. The multiple consolidation method relies on the concept of indirect ownership
interests to correctly determine the allocation of the consolidated equities of the group
to the ownership interests in the group. By allocating the post-acquisition profits and
reserves of subsidiaries to indirect ownership interests, the multiple consolidation
method produces the same result that would be achieved using the sequential
consolidation method. However, the multiple consolidation method has the distinct
advantage of being less complicated to apply and so it is generally preferred in
practice.

The use of direct and indirect ownership interests in a multiple consolidation is

summarised in the following table.

Eliminations and adjustments Relevant ownership interest

Investment in subsidiary direct interest of immediate parent entity

Inter-entity dividends direct interest of immediate parent entity

Goodwill impairment or discount ownership interest irrelevant

Inter-entity sales or management fees ownership interest irrelevant

Unrealised profits in inventory or plant ownership interest irrelevant

Inter-entity loans or receivables ownership interest irrelevant

Allocation of consolidated equities Relevant ownership interest

Issued capital: pre-acquisition Direct interest of NCI

Opening retained earnings: pre-acquisition Direct interest of NCI

Opening retained earnings: post-acquisition Direct + Indirect interests of NCI

Current period profit: post-acquisition Direct + Indirect interests of NCI

Dividends appropriated Direct interest of NCI

Transfers to/from reserve: pre-acquisition Direct interest of NCI

Transfers to/from reserve: post-acquisition Direct + Indirect interests of NCI

Reserves: pre-acquisition Direct interest of NCI

Reserves: post-acquisition Direct + Indirect interests of MI

Note that the focus in the allocation process in on the NCI ownership interests
because the PI can be determined as a residual amount.

Copyright ©2012 Pearson Australia (a division of Pearson Australia Group Pty Ltd) – 10
9781442519565/Arthur/Accounting for Corporate Combinations and Associations
Visit https://testbankbell.com
now to explore a rich
collection of testbank,
solution manual and enjoy
exciting offers!
Question 6.7 NCI allocation rules (Sections 6.3.2 and 6.3.3)

The allocation rules for the multiple consolidation method are applied to the equities
of subsidiaries as follows:

Pre-acquisition issued capital, profits and reserves Direct NCI

Post-acquisition profits, reserves and surpluses Direct + Indirect NCI

Direct + Indirect NCI

Dividend distributions Direct NCI

Transfers to/from reserves - pre-acquisition profits Direct NCI

Transfers to/from reserves - post-acquisition profits Direct + Indirect NCI

Direct + Indirect NCI

Note that there is no direct PI in the amounts of consolidated pre-acquisition issued

capital, profits, reserves and surpluses of subsidiaries because the parent entity’s
interest in the pre-acquisition equities is eliminated against the investment account.
Similarly, the direct PI does not have an interest in the dividends paid by subsidiaries
because inter-entity dividends between members of a complex group have been
eliminated on consolidation.

It is important to note that indirect ownership interests only arise after (or at the same
time) a direct interest has been established between a subsidiary and sub-subsidiary.
The date of this event determines to what extent the equities of the sub-subsidiary are
pre-acquisition and post-acquisition to the indirect NCI.

The intuition behind the allocation rule for post-acquisition profits can be explained
by considering the distribution of profit through a chain of entities. For example:

75% 80%
H ⎯⎯⎯⎯→ S1 ⎯⎯⎯⎯→ S2

Assume S2 made $100 of post acquisition profits and fully distributed the profit to its
shareholders as dividends. Then assume S1 fully distributed the $80 dividend received
from S2 to its shareholders as dividends. The result is that $100 of post-acquisition
profits made by S2 will ultimately be distributed to the PI and NCI in proportion to
their direct and indirect interests: PI 60% x $100 = $60 and NCI 40% x $100 = $40.

Copyright ©2012 Pearson Australia (a division of Pearson Australia Group Pty Ltd) – 11
9781442519565/Arthur/Accounting for Corporate Combinations and Associations
Question 6.8 Intragroup transactions and relevance to NCI (Sections 6.3.2 and
6.3.3)

The method to be used for the measurement of non-controlling interest is not clearly
specified in AASB 127. In fact the accounting standard is silent on this issue.
Accordingly, the method to be used to calculate the amount of NCI can only be
inferred by the other requirements of the standard. Although such inferences can
arguably be made, other inferences might be possible and accounting methods might
be used which may have little theoretical foundation.

One requirement of the standard is to eliminate the financial effects of transaction

within the group. Hence inter-entity balances (e.g. loans) and profits need to be
eliminated in full. In other words, for financial reporting purposes just as an entity
cannot transact with itself nor can a group. The elimination of the financial effects of
all transactions between members of the group is consistent with the economic entity
concept of consolidation. In the absence of consolidation eliminations and
adjustments for intra-entity transactions, management could opportunistically arrange
non-arms length transactions between certain members of the group to artificially
improve the financial performance and financial position that is reported.

If management only adjusts for transactions that involve the ultimate parent entity in
calculating the amount of NCI, this would lead to a number of inconsistencies.
Whether the shareholder in a partly owned subsidiary, the ultimate parent of the
complex group or another subsidiary within the group, it will make no difference to
the NCI calculation. The reality is that any unrealised profits on transactions within
the group need to be eliminated in full – no matter whether the transaction involves
the parent entity or some other entities. Consistent with this, if the measurement
involves the calculation of the NCI share of consolidated profit, the amounts of profits
or losses of an entity that are not included in consolidated amounts would not seem to
be relevant.

Copyright ©2012 Pearson Australia (a division of Pearson Australia Group Pty Ltd) – 12
9781442519565/Arthur/Accounting for Corporate Combinations and Associations
Question 6.9 Calculation of NCI in the profits of subsidiaries adjusted for
unrealised profits (Sections 6.3.2 and 6.3.3)

The ownership interests in the complex group are shown below.

PI NCI

A Ltd

Direct PI Direct NCI Direct NCI

60% 40% 20%

B Pty Ltd

Indirect PI Indirect NCI

60% x 80% = 48% 80% 40% x 80% = 32%

C Pty Ltd

Ownership interests in A Ltd’s subsidiaries

B Pty C Pty
Ltd Ltd
Parent Interest (PI)
Direct 60% -
Indirect - 48%
Non-controlling Interest (NCI)
Direct 40% 20%
Indirect - 32%
100% 100%

Copyright ©2012 Pearson Australia (a division of Pearson Australia Group Pty Ltd) – 13
9781442519565/Arthur/Accounting for Corporate Combinations and Associations
The calculation of the non-controlling interest in the profit for the year of both
subsidiaries is as follows:

NCI B Ltd NCI C Ltd NCI

% $ % $ $

Profit for the year

6,500,000 1,500,000
Add: Unrealised profit 100,000 200,000
before tax in opening
inventory 1.7.X9

Less: Tax effect -30,000 -60,000

Less: Unrealised profit - -350,000
before tax in closing
inventory 30.6.X0

Add: Tax effect - 105,000

Contributed net profit 6,570,000 395,000
Direct NCI 40% 20%
2,628,000 279,000 2,907,000
Indirect NCI 0% 32%
- 446,400 446,400

Non-controlling interest
in profit for the year 2,628,000 725,400 3,353,400

Notes to the NCI calculation

1. The recorded profit of each subsidiary is adjusted for the unrealised profits that
each subsidiary has made from intra-entity sales of inventory. It is important not
to confuse the entity with the inventory on hand with the entity that has generated
an intra-entity profit. For example, the opening inventory of C Pty Ltd at 1.7.X9
includes profit before tax of $100,000 from an intra-entity sale but this profit has
been earned by B Pty Ltd not C Pty Ltd.

2. Any intra-entity profits earned by A Ltd (the ultimate parent entity) are irrelevant
to the calculation of the NCI. In general, the profits of the ultimate parent entity
will be wholly attributable to the PI.

Copyright ©2012 Pearson Australia (a division of Pearson Australia Group Pty Ltd) – 14
9781442519565/Arthur/Accounting for Corporate Combinations and Associations
Question 6.10 Calculation of NCI in the profit of subsidiaries adjusting for inter-
entity dividends (Sections 6.3.2 and 6.3.3)

The figure below illustrates the ownership interests in the No. 1 Ltd group

Indirect NCI Direct NCI

No. 1 Ltd

90% 10%

No. 2 Ltd

10% x 80%
= 8% 80% 20%

No. 3 Ltd

(10% x 80% x 60%)

+ (20% x 60%)
= 16.8% 60% 40%

No. 4 Ltd

Ownership interests in No. 1 Ltd subsidiaries

No. 2 No. 3 No. 4

Ltd Ltd Ltd
Parent Interest (PI)
Direct 90% - -
Indirect - 72% 43.2%
Non-controlling Interest (NCI)
Direct 10% 20% 40.0%
Indirect - 8% 16.8%
100% 100% 100%

Copyright ©2012 Pearson Australia (a division of Pearson Australia Group Pty Ltd) – 15
9781442519565/Arthur/Accounting for Corporate Combinations and Associations
Exploring the Variety of Random
Documents with Different Content
The Project Gutenberg eBook of Last Call for
Doomsday!
This ebook is for the use of anyone anywhere in the United States
and most other parts of the world at no cost and with almost no
restrictions whatsoever. You may copy it, give it away or re-use it
under the terms of the Project Gutenberg License included with this
ebook or online at www.gutenberg.org. If you are not located in the
United States, you will have to check the laws of the country where
you are located before using this eBook.

Title: Last Call for Doomsday!

Author: Edmond Hamilton

Release date: July 10, 2021 [eBook #65817]

Most recently updated: July 27, 2021

Language: English

Credits: Greg Weeks, Mary Meehan and the Online Distributed

Proofreading Team at http://www.pgdp.net

*** START OF THE PROJECT GUTENBERG EBOOK LAST CALL FOR

DOOMSDAY! ***
 Wales saw men around him become savage
beasts, shooting, looting, killing in frantic
hysteria. Men without hope, they awaited the—

Last Call For Doomsday!

 By S. M. Tenneshaw

[Transcriber's Note: This etext was produced from

Imagination Stories of Science and Fantasy
December 1956
Extensive research did not uncover any evidence that
the U.S. copyright on this publication was renewed.]
A deep shudder shook Jay Wales. He wished now he hadn't had to
come back here to Earth this last time. He wanted to remember the
old world of man as it had been, not as it was now in its dying hour.
"It seems impossible that it will really happen," said Hollenberg, the
docket captain.
He wasn't looking at Earth. He was looking beyond it at the glittering
stars.
Wales looked too. He knew where to look. He saw the faint little
spark of light far across the Solar System.
A spark, a pinpoint, an insignificant ray upon the optic nerves—that
was all it was.
That—and the hand of God reaching athwart the universe.
"It'll happen," said Wales, without turning. "September 27th, 1997.
Four months from now. It'll happen."
The rocket-ship was suddenly convulsed through all its vast fabric by
the racking roar of brake-jets letting go. Both men exhaled and lay
back in their recoil-chairs. The thundering and quivering soon ceased.
"People," said Hollenberg, then, "are wondering if it really will.
Happen, I mean."
For the first time, Wales looked at him sharply. "People where?"
Hollenberg nodded toward the window. "On Earth. Every run we
make, we hear it. They say—"
And here it was again, Wales thought, the rumors, the whispers, that
had been coming out to Mars, stronger and more insistent each
week.
There in the crowded new prefab cities on Mars, where hundreds of
millions of Earth-folk were already settling into their new life, with
millions more supposed to arrive each month, the rumors were
always the same.
"Something's wrong, back on Earth. The Evacuation isn't going right.
The ships aren't on schedule—"
Wales hadn't worried much about it, at first. He had his own job.
Fitting the arriving millions into a crowded new planet, a new, hard
way of life, was work enough. He was fourth in command at
Resettlement Bureau, and that meant a job that never ended.
Even when the Secretary called him in to the new UN capital on
Mars, he'd only expected a beef about resettlement progress. He
hadn't expected what he got.
The Secretary, an ordinarily quiet, relaxed man, had been worn thin
and gray and nervous by a load bigger than any man had ever
carried before. He had wasted no time at all on amenities when
Wales was shown in.
"You knew Kendrick personally?"
There was no need to use first names. Since five years before, there
was only one Kendrick in the world who mattered.
"I knew him," Wales had said. "I went to school with both Lee and
Martha Kendrick—his sister."
"Where is he?"
Wales had stared. "Back on Earth, at Westpenn Observatory. He said
he'd be along soon."
The Secretary said, "He's not at the Observatory. He hasn't come to
Mars yet, either. He's disappeared."
"But, why—"
"I don't care why, Wales. I want to know where. Kendrick's got to be
found. His disappearance is affecting the Evacuation. That's the
report I get from a dozen different men back on Earth. I message
them, 'Why are the rocket-schedules falling behind?' I tell them, 'It's
Doomsday Minus 122, and Evacuation must go faster.' I get the
answer back, 'Kendrick's disappearance responsible—are making
every effort to find him'."
After a silence the Secretary had added, "You go back to Earth,
Wales. You find Kendrick. You find out what's slowing down
Evacuation. We've got to speed up, man! There's over twelve million
people still left on Earth."
And here he was, Wales thought, in a rocket-ship speeding back to
Earth on one of the endless runs of the Marslift, and he still didn't
know why Evacuation had slowed, or what Lee Kendrick's
disappearance had to do with it, and he'd have precious little time to
find out.

They were sweeping in in a landing-pattern now, and the turquoise

had become a big blue balloon fleeced with white clouds. And
Hollenberg was far too busy with his landing to talk now. The rocket-
captain seemed, indeed, relieved not to be questioned.
The rush inward, the roar of air outside the hull, the brake-blasts
banging like the triphammers of giants, the shadowed night side of
the old planet swinging up to meet them....
When he stepped out onto the spaceport tarmac, Wales breathed
deep of the cool night air. Earth air. There was none like it, for men.
No wonder that they missed its tang, out there on Mars. No wonder
old women in the crowded new cities out there still cried when they
talked of Earth.
He braced back his shoulders, buttoned the tunic of his UN uniform.
He wasn't here to let emotion run away with him. He had a job. He
got onto one of the moving beltways and went across the great
spaceport, toward the high, gleaming cluster of lights that marked
the port headquarters.
Far away across the dark plain loomed the massive black bulks of
rocket-ships. Dozens of them, hundreds of them. And more were
coming in, on rigid landing-schedule. The sky above, again and
again, broke with thunder and the great ships came riding their
brake-jets of flame downward.
Wales knew, to the last figure, how many times in the last years ships
had risen from this spaceport, and how many times, having each one
carried thousands of people to Mars, they had returned. Tens of
millions had gone out from here. And New Jersey Spaceport was only
one of the many spaceports serving the Evacuation. The mind reeled
at the job that had been done, the vast number who had been taken
to that other world.
And it was still going on. Under colored lights, Wales saw the long
queue of men, women, children moving toward one of the towering
ships nearby. Signals flashed. Loudspeakers bawled metallically.
"—to Ship 778! All assigned to Ship 778 this way! Have your
evacuation-papers ready!"
Wales went by these people, not looking at their faces, not wanting
to see their faces.
The noise and crowded confusion got worse as he neared the
Administration Building. Near it the buses were unloading, the
endless cargoes of people, people—always people, always those pale
faces.
An armed guard outside Administration's entrance looked at Wales'
uniform and then at his credentials, and passed him through.
"Port Coordinator's office straight ahead," he said.
The interior of the building was a confusion of uniformed men, and
women, of clicking tabulating machines, of ringing phones.
Wales thought that here you felt the real pulse of the Marslift. A pulse
that had quickened now—like the pulse of a dying man.
Bourreau, the Port Coordinator, was a stocky, bald sweating man,
who had thrown off his uniform jacket and was drinking coffee at his
desk when Wales came in.
"Sit down," he said. "Heard you were coming. Heard the Secretary
was sending you to burn our tails."
"Nothing like that," said Wales. "He just wants to know, why the devil
are Evacuation schedules falling behind?"
Bourreau drained his cup, set it down, and wiped his mouth. "Listen,"
he said, "you don't want to talk to me."
"I don't?"
"No, I'm the Port Coordinator, that's all. I've passed millions of people
through here. Evacuation Authority sends them in here, from the
marshalling point over in New York. Good people, not-so-good
people, and people that aren't worth saving. But to me, they're all
just units. They reach here, I shoot them out. That's all. The man
you want to talk to is John Fairlie."
"The regional Evacuation Marshal?"
"Yes. Talk to him, over in New York. I've got a car and driver ready
for you."

Wales stood up. It was obvious that Bourreau had been all ready for
him, and was not going to take a rap for anybody. It was equally
obvious that he'd learn nothing about Kendrick's disappearance from
this man.
"All right," he said. "I'll see Fairlie first."
The driver of the car, a UN private, turned off on a side road almost
as soon as they left the spaceport.
"No use bucking all the buses and trucks on the evacuation
thruways," he said. "We use the old roads when we want to hurry. No
traffic on them now."
The old roads. The ribbons of concrete and asphalt that once had
carried thousands of cars, day and night. Now they were dark and
empty.
The car went through a village. It too was dark and empty. They
swung on through countryside, without a light in it. And then there
was a bigger village, and its dark windows stared at them like blind
eyes.
"All evacuated," said the driver. "Every village, town, farm, between
here and New York was closed out two-three years ago."
Wales, sitting hunched by the open window, watching the road
unreel, saw an old farmhouse on the curve ahead. The headlights
caught it, and he saw that all its window-shutters were closed.
Someone, some family, had left that house forever and had carefully
shuttered its windows—against doomsday.
The poplars and willows and elms went by, and now and again there
was a drifting fragrance of flowers, of blossoming orchids. Old apple-
trees, innocently ignorant of world's end, were preparing to fruit once
more.
Wales felt a sharp, poignant emotion. He asked himself, as a world
had been asking for five years, Why did it have to be?
There was only one answer. Far out in the dark lonesomeness of the
solar system, far beyond man's new Martian colonies, the thousands
of asteroids that swung in incredibly intricate and eccentric orbits—
they were the answer. They had been shuttles, weaving fate's web.
Kendrick had been the first to see it, to note the one big asteroid
whose next passage near Jupiter would make its eccentricity of orbit
too great. With camera and telescope Kendrick had watched, and
with the great electronic calculators he had plotted that orbit years
ahead, and....
Wales had often wondered what Lee Kendrick had felt like when the
first knowledge came to him, when the first mathematical formulae of
doom came out on the calculator printing-tape. Mene, Mene, Tekel,
Upharsin, spelled out in an equation. An electronic computer,
passionately prophesying the end of man's world....
"In five years, the eccentricity of the asteroid Nereus will bring it
finally across Earth's orbit at a point where it will collide with Earth.
This collision will make our planet uninhabitable."
He well remembered the first stupefaction with which the world had
received the announcement, after Kendrick's calculations had been
proved beyond all doubt.
"No force available to us can destroy or swerve an asteroid so big.
But in five years, we should be able to evacuate all Earth's people to
Mars."
Kendrick, Wales thought now, had been able to give Earth the years
of advance warning that meant escape, the years in which the tens of
thousands of great rocket-ships could be built and the Marslift get
under way. If mankind survived, it would be due to Kendrick's
warning. Why should he vanish now?
Wales suddenly became conscious that his driver was putting on the
brakes. They were in the outskirts of Morristown.
The streets here were not all dark and dead. He saw the glimmer of
flashlights, the movement of dark figures, and heard calling voices.
"I thought you said these cities were all closed out?" Wales said.
The driver nodded. "Yeah. But there's still people around some of
them. Looters." He stopped. "We'd better detour around here."
"Looters?" Wales was astounded. "You mean, you don't stop them?"
"Listen," said the driver. "What difference does it make what they
take, when the place is closed out?"
Wales had forgotten. What difference did it make, indeed? The
nearly-deserted Earth was any man's property now, when inevitable
catastrophe was rushing toward it.
A thought struck him. These folk couldn't expect to take loot with
them when they were evacuated. So they didn't plan to be
evacuated.
He said, "Wait here. I'm going to have a look at them."
"I wouldn't," said the driver hastily. "These people—"
"Just wait," said Wales crisply.
He walked away from the car, toward the flashlights and the shadows
and the shouting voices.
The voices had a raw edge of excitement in them, and a few were
thick with alcohol. They were mixed men and women, and a few
yelping youngsters.
They weren't breaking windows. They simply used crowbars to force
open doors. Many doors weren't even locked. Eager hands passed
out a motley collection of objects, small appliances, liquor bottles,
canned synthefood, clothing.
No wonder Evacuation was going off schedule, thought Wales!
Letting people play the fool like this—
A flashlight beam flared beside him, a man's face peered at his
uniform, and a loud voice bellowed close to his ears, "Look,
everybody! It's an Evacuation Officer!"
There was a dead silence, and then the flashlights converged on him.
Somewhere in the group, a woman screamed.
"They're after us! They're going to put us on the ships and take us
away!"
"Kill the bastard, knock him down!" yelled a raging voice.
Wales, too astounded to defend himself, felt a sudden shower of
clumsy blows that sent him to his knees.

CHAPTER II
It was the very number of Wales' attackers that saved him. There
were too many of them, they were too eager to get at him. As he hit
the pavement, they dropped their flashlights and crowded around in
the dark, getting in each other's way, like frantic dogs chivvying a
small animal.

A foot trampled his shoulder and he rolled away from it. All around
him in the dark were trousered legs, stumbling over him. Voices
yelled, "Where is he?" They yelled, "Bring the lights!"
The lights, if they came, would mean his death. A mob, even a small
mob like this one, was a mindless animal. Wales, floundering amid
the dark legs, kept his head. He shouted loudly,
"Here come the Evacuation trucks—here they come! We'd better beat
it!"
He didn't think it would work, but it did. In that noisy, scuffling
darkness, no one could tell who had shouted. And these people were
already alarmed.
The legs around him shifted and stamped and ran away over the
pavement. A woman screeched thinly in fear. He was alone in the
dark.
He didn't think he would be left alone for long. He started to
scramble to his feet, beside the curb, and his hand went into an
opening—a long curbside storm-sewer drain.
A building was what he had had in mind, but this was better. He got
down on his belly and wormed sidewise into the drain. He lay quiet,
in a concrete cave smelling of old mud.
Feet came pounding back along the streets, he glimpsed beams of
light angling and flickering. Angry voices yelled back and forth. "He's
not here. He's got away. But there must be other goddamned
Evacuation men around. They're going to round us up—"
"By God, nobody's going to round me up and take me to Mars!" said
a deep bass voice right beside Wales.
Somebody else said, "All that nonsense about Kendrick's World—"
and added an oath.
Wales lay still in his concrete hole, nursing his bruised shoulder. He
heard them going away.
He waited, and then crawled out. In the dark street, he stood, muddy
and bruised, conscious now that he was shaking.
What in the world had come over these people? At first, five years
ago, it had been difficult to convince many that an errant asteroid
would indeed ultimately crash into Earth. Kendrick's first
announcement had been disbelieved by many.
But when all the triple-checking by the world's scientists had
confirmed it, the big campaign of indoctrination that the UN put on
had left few skeptics. Wales himself remembered how every medium
of communication had been employed.
"Earth will not be destroyed," the UN speakers had repeated over and
over. "But it will be made uninhabitable for a long time. The asteroid
Nereus will, when it collides, generate such a heat and shock wave
that nothing living can survive it. It will take many years for Earth's
surface to quiet again after the catastrophe. Men—all men—must live
on Mars for perhaps a whole generation."
People had believed. They had been thankful then that they had a
way of escape from the oncoming catastrophe—that the colonization
of Mars had proceeded far enough that it could serve as a sanctuary
for man, and that modern manufacture of synthetic food and water
from any raw rock would make possible feeding all Earth's millions
out on that arid world.
They had toiled wholeheartedly at the colossal crash program of
Operation Doomsday, the building of the vast fleet of rocket-ship
transports, the construction and shipping out of the materials for the
great new prefab Martian cities. They had, by the tens and hundreds
of millions, gone in their scheduled order to the spaceports and the
silver ships that took them away.
But now, with millions still left on Earth, there was a change. Now
skepticism and rebellion against Evacuation were breeding here on
Earth.
It didn't, Wales thought, make sense!
He was suddenly very anxious to reach New York, to see Fairlie.

He went back along the dark street to the main boulevard, where the
little white route signs glimmered faintly. He looked for the car, but
did not see it.
Shrugging, Wales started along the highway. He couldn't be too far
from the big Evacuation Thruways.
He had gone only a few blocks in the dark, when lights suddenly
came on and outlined him. He whirled, startled.
"Mr. Wales," said a voice.
Wales relaxed. He walked toward the lights. It was the car, and the
driver in the UN uniform, parked back in an alley.
"I thought you were back at the spaceport by now," Wales said
sourly.
The driver swore. "I wasn't going to run away. But no use tackling
that crowd. Didn't I warn you? An Evacuation uniform sets them
crazy."
Wales got in beside him. "Let's get out of here."
As they rolled, he asked, "When I left Earth four years ago, there
didn't seem a soul who doubted Doomsday. Why are these people
doubtful now?"
The driver told him, "They say Kendrick's World is just a scare, that
it's not going to hit Earth after all."
"Who told them that?"
"Nobody knows who started the talk. Not many believed it at first.
But then people began to say, 'Kendrick was the one who predicted
Doomsday—if he really believed it, he'd leave Earth!'"
"What did Kendrick say to that?"
"He didn't say anything. He just went into hiding, they say. Leastwise,
the officials admitted he hadn't gone to Mars. No wonder a lot of
folks began to say, 'He knows his prediction was wrong, that's why
he's not leaving Earth!'"
Wales asked, after a time, "What do you think, yourself?"
The driver said, "I'm going out on Evacuation, for sure. So maybe
Kendrick and the rest are wrong? What have I got to lose? And if the
big crash does come, I won't be here."
Dawn grayed the sky ahead as the car rolled on through more and
more silent towns. It took to a skyway and as they sped above the
roofs, the old towers of New York rose misty and spectral against the
brightening day.
In the downtown city itself, they were suddenly among people again.
They were everywhere on the sidewalks and they were a variegated
throng. Workers and their families from the midwest, lumbermen and
miners from the north, overweight businessmen, women, children,
babies, dogs, birds in cages, a shuffling, slow-moving mass of
humanity walking aimlessly up and down the streets, waiting their
call-up to the buses and the spaceports and the leaving of their
world.
Evacuation Police in their gray uniforms were plentiful, and to Wales'
surprise they were armed. Only official cars were in the streets, and
Wales noticed the frequent unfriendly looks his own car got from
faces here and there in the throngs. He didn't suppose people would
be too happy about leaving Earth.
The big new UN Building, towering over the city, had been built thirty
years before to replace the old one. He had supposed it would be an
empty shell, now that the whole Secretariat was out on Mars. But it
wasn't. Here was Evacuation headquarters for a whole part of
America, and the building was jammed with officials, files, clerks.
He was expected, it seemed. He went right through to the regional
Evacuation Marshal's office.

John Fairlie was a solid, blond man of thirty-five or so, with the kind
of radiant strength, health, and intelligence that always made Wales
feel even more lanky and shy than he really was.
"We've been discussing your mission here," Fairlie said bluntly. He
indicated the three other men in the room. "My friends and fellow-
officials—they're assistants to Evacuation Marshals of other regions.
Bliss from Pacific Coast, Chaumez from South America, Holst from
Europe—"
They were men about Fairlie's age, and Wales thought that they were
anxious men.
"We don't resent your coming, and you'll get 100 percent cooperation
from all of us," Fairlie was saying. "We just hope to God you can get
Evacuation speeded up to schedule again. We're worried."
"Things are that bad?" said Wales.
Bliss said gloomily, "Bad—and getting worse. If it keeps up, there's
going to be millions still left on Earth when Doomsday comes."
"What," asked Wales, "do you think ought to be done first?"
"Find Kendrick," said Fairlie promptly.
"You think his disappearance that important?"
"I know it is." Fairlie strode up and down the office, his physical
energy too restless to be still. "Listen, Wales. It's the fact that
Kendrick, who first predicted the catastrophe, hasn't himself left
Earth that's deepening all these doubts. If we could find Kendrick and
show people how he's going to Mars, it would discredit all this talk
that his prediction was a mistake, and that he knows it."
"You've already tried to find him?"
Fairlie nodded. "I've had the world combed for him. I wish I could
guess what happened to him. If we could only find his sister, even, it
might lead to him."
Yes, Wales thought. Martha and Lee Kendrick had always been close.
And now they had vanished together.
He told Fairlie what had happened to him in the Jersey City. Neither
Fairlie nor the others seemed much surprised.
"Yes. Things are bad in some of the evacuated regions. You see, once
we get all the listed inhabitants out, we can't go back to those places.
We haven't the time to keep going over them. So others—the ones
who don't want to go—can move into the empty towns and take
over."
"Why don't they want to go?" Wales studied the other's face as he
asked the question. "Five years ago, everyone believed in the crash,
in the coming of Doomsday. Now people here are skeptical. You say
that Kendrick might convince them. But what made them skeptical, in
the first place?"
Fairlie said, "I don't know, not for sure. But I can tell you what I
think."
"Go ahead."
"I think it's secret propaganda at work. I think Evacuation is being
secretly sabotaged by talk that Doomsday is all a hoax."
Wales was utterly shocked. "Good God, man, who would do a thing
like that? Who would want millions of people to stay on Earth and die
on Doomsday?"
Fairlie looked at him. "It's a horrible thought, isn't it? But fanatics will
sometimes do horrible things."
"Fanatics? You mean—"
Fairlie said, "We've been hearing rumors of a secret organization
called the Brotherhood of Atonement. A group—we don't know how
large, probably small in numbers—who seem to have been crazed by
the coming of Doomsday. They believe that Nereus is a just
vengeance coming on a sinful Earth, and that Earth's sins must be
atoned by the deaths of many."
"They're preaching that doctrine openly?" Wales said, incredulous.
"Not at all. Rumors is all we've heard. But—you wondered who would
want millions of people to stay on Earth till Doomsday. That's a
possible answer."
It made, to Wales, a nightmare thought. Mad minds, unhinged by the
approach of world's end, cunningly spreading doubt of the oncoming
catastrophe, so that millions would doubt, and would stay—and
would atone.

Bliss said, "The damn fools, to believe such stuff! Well, if they get
caught on Earth, it'll be the craziest, most ignorant and backward
part of the population that we'll lose."
Fairlie said wearily, "Our job is not to lose anybody, to get them all off
no matter who or what they are."
Then he said to Wales, with a faint smile, "Sorry if we seem to be
griping too much. I expect your job on Mars hasn't been easy either.
Things are pretty tough there, aren't they?"
"They're bound to be tough," said Wales. "All those hundreds of
millions, and more still coming in. But we'll make out. We've got to."
"Anyway, that's not my worry," Fairlie said. "My headache is to get
these stubborn, ignorant fools who don't want to go, off the Earth."
Wales thought swiftly. He said, after a time, "You're right, Kendrick is
the key. I came here to find him and I've got to do it."
Fairlie said, "I hope to God you can. But I'm not optimistic. We looked
everywhere. He's not at Westpenn Observatory."
"Lee and Martha and I grew up together in that western Pennsylvania
town," Wales said. "Castletown."
"I know, we combed the whole place. Nothing."
"Nevertheless, I'll start there," said Wales.
Fairlie told him, "That's all evacuated territory, you know. Closed out
and empty, officially. Which means—dangerous."
Wales looked at him. "In that case, I'll want something else to wear
than this uniform. Also I'll want a car—and weapons."
It was late afternoon by the time Wales got the car clear of the
metropolitan area, out of the congested evacuation traffic. And it was
soft spring dusk by the time he crossed the Delaware at Stroudsburg
and climbed westward through the Poconos.
The roads, the towns, were empty. Here and there in villages he saw
gutted stores, smashed doors and windows—but no people.
As the darkness came, from behind him still echoed the boom-boom
of thunder, ever and again repeated, of the endless ships of the
Marslift riding their columns of flame up into the sky.
By the last afterglow, well beyond Stroudsburg, he looked back and
thought he saw another car top a ridge and sink, swiftly down into
the shadow behind him.
Wales felt a queer thrill. Was he being followed? If so, by whom? By
casual looters, or by some who meant to thwart his mission? By the
society of the Atonement?
He drove on, looking back frequently, and once again he thought he
glimpsed a black moving bulk, without lights, far back on the
highway.
He saw only one man that night, on a bridge at Berwick. The man
leaned on the rail, and there was a bottle in his hand, and he was
very drunk.
He turned a wild white face to Wales' headlights, and shook the
bottle, and shouted hoarsely. Only the words, "—Kendrick's World—"
were distinguishable.
Sick at heart, Wales went by him and drove on.

CHAPTER III

All that night, his car rolled across an unlighted, empty world. Wary
of the great thruways, he followed the lesser roads. And every
village, every town, every hillside or valley farm, was dark and silent.
All this area that included Pennsylvania had been evacuated two
years ago, and the people of these houses were now living the new
life in the sprawling new cities on another planet.
Twice Wales stopped his car and cut the motor and lights, and
waited, listening. Once he was sure that he heard a distant humming
from far back along the highway, but it fell silent, and though he
waited with gun in hand, no one came. So each time he drove on,
but he could not rid himself of the conviction that someone followed
him secretly.
With morning, his spirits lifted a little. He was only an hour's drive
from the old Pennsylvania-Ohio line where the town of Castletown
was. And there, if anywhere, he must find the trail to Lee and Martha
Kendrick.
Kendrick, to the world, had become identified with the asteroid that
was plunging ever nearer in its fateful orbit. It had, from the first,
been called Kendrick's World. Kendrick, if anyone could, might
convince those who had begun to doubt Doomsday. If Kendrick could
be found....
Wales drove down a winding hillside road into the town of Butler, ten
minutes later—and ran smack into a barricade.
The moment he saw the cars drawn up to block the highway, he tried
to swing around fast. But he wasn't quick enough.
A voice said, "Kill the motor and get out."
Men had come out of the bushes that, in two years, had grown up
close to the highway. They were unshaven men, wearing dirty jeans,
with rifles in their hands. There were two on one side of the highway,
and an older man on the other.
Wales looked at their dusty faces. Then he cut the motor and got out
of the car.
They took his weapons, and the older man said, "You can put your
hands down now. And come along with us."
"Where?"
"You'll see."
One man remained, searching Wales' car. The other two, their rifles
on the ready, walked beside Wales down the long winding hill
highway into the old town.
"I thought all these towns were evacuated," said Wales.
"They were, a long time ago," said the older man.
"But you men—"
"We're not from here. Now anything more you want to know, you ask
Sam Lanterman. He'll have some things to ask you."
The main street of the town looked to Wales vaguely like a gypsy
camp. Dusty cars were parked double along it, and there was a
surprising number of men and women and kids about. The men all
carried rifles or wore belted pistols. The children were pawing around
in already-looted stores, and most of the women looked with a blank,
tired stare at Wales and his guard.
They took him into the stone courthouse. In the courtroom, dimly
lighted and smelling of dust and old oak, four men were seated
around what had once been a press-table. One of Wales' captors
spoke to the man at the head of the table.
"Got a prisoner, Sam," he said importantly. "This fellow. He was
driving from the east."
"From the east, was he?" said Lanterman. "Well, now, he might just
have come from the south and swung around town, mightn't he?"
He looked keenly at Wales. He was a gangling man of forty with a red
face and slightly bulging blue eyes that had a certain fierceness in
them. The others at the table were two heavy men who looked like
farmers, and a small, dark, vicious-looking young man.
"You didn't," said Lanterman, "just happen to come from Pittsburgh,
did you?" They all seemed to watch him with a certain tenseness, at
this.
Wales shook his head. "I came from the east, all the way across
state."
"And where were you heading?"

Wales didn't like the implications of that "were". He said, "To

Castletown. I'm looking for my girl. It's where she used to live."
"People in Castletown been gone two years," Lanterman said
promptly. "To Mars—the damn fools!" And he suddenly laughed
uproariously.
More and more worried, Wales said, "She wrote me she wasn't going
to leave till I came."
"You're not one of those Evacuation Officials, are you?" Lanterman
asked shrewdly.
"A lot more likely he comes from Pittsburgh," said the dark young
man.
Wales, sensing an increasing suspicion and danger, thought his safest
bet was honest indignation. He said loudly,
"Look, I don't know what right you have to stop me when I'm trying
to reach my girl! I'm not an Evac official and I don't know what all
this talk about Pittsburgh means. Who made you the law around
here?"
"Son," said Lanterman softly, "there isn't any law any more. The law
left here when all the people left—all except a few who wouldn't be
stampeded off Earth by a lot of moonshiny science nonsense."
Wales said, as though himself dubious, "Then you don't think there's
really going to be Doomsday, like they say?"
"Do you think so?"
Wales pretended perplexity. "I don't know. All the big people, the
Government people and all, have told us over and over on the
teevee, about how Kendrick's World will hit the Earth—"
"Kendrick's so-and-so," said one of the farmer-looking men,
disgustedly.
"I thought," said Wales, "that I'd see if my girl was going to leave,
before I decided."
He wondered if he weren't laying on the stupid yokel a little too thick.
But he had realized his danger from the first.
All the bands of non-evacuees who remained in closed-out territory,
making their own law, were dangerous. He'd found that out in
Morristown only last night. And Lanterman and his men seemed
especially suspicious, for some reason.
"Look," said Lanterman, and then asked, "What's your name,
anyway?"
"Jay Wilson," said Wales. His name had been in the news, and he'd
better take no chances.
"Well, look now, Wilson," said Lanterman, "you don't always want to
believe what people tell you. Me, I'm from West Virginia. Had a farm
there. On the TV it told us how this Kendrick had found out Earth was
going to be destroyed, how, everyone would have to go to Mars. My
woman said, 'Sam, we'll have to go.' I said, 'Don't you get in a panic.
People have always been predicting the end of the world. We'll wait a
while and see.' Lot of our neighbors packed up and went off. People
came to tell us we'd better get going too. I told them, I don't panic
easy, I'm waiting a while."
Lanterman laughed. "Good thing I did. More'n a year went by, and
the world didn't end. And then it turned out that this here Kendrick
that started the whole stampede—he hadn't left Earth. Not him! Got
all the fools flying out to Mars on his say-so, but wasn't fool enough
to go himself. Fact is, people say he's hiding out so the Evacuation
officials can't make him go. Well, if Kendrick himself won't go, that
predicted it all, why should we go?"
And that, Wales thought despairingly, was the very crux of the
problem. Where was Lee Kendrick anyway? He must know that his
remaining on Earth was being fatally misinterpreted by people like
these.
Lanterman added, with a certain complacency, "All the fools went,
and left their houses, cars, cities. Left 'em to those of us who wasn't
fools! That's why we gathered together. Figured we might as well
pick up what they'd left. We got near a hundred men together, I said,
'Boys, let's quit picking over these empty villages and take a real rich
town. Let's go up to Pittsburgh.'"
One of the farmer-men said gloomily, "Only this Bauder had the idea
first. His bunch took over Pittsburgh, as we found out."
Lanterman's eyes flashed. "But they're not going to keep it! Since we
first tried it, we've got a lot more men. One or two joining us every
few days. We'll show Bauder's outfit something this time!"
Of a sudden, the strangeness of the scene struck at Wales. A few
years before, this quiet old country courthouse had been the center
of a busy, populous town, of a county, a nation, a world.
Now world and nation were drained of most of their people. An Earth
almost de-populated lay quiet, awaiting the coming of the destruction
from space. Yet men who did not believe in that destruction, men in
little bands, were, with the passing of all law, contending for the
possession of the great evacuated cities.
Lanterman stood up. "Well, what about it, Wilson? You want to join
up with us and take Pittsburgh away from Bauder? Man, the loot
there'll be—liquor, cars, food, everything!"

Wales knew he had no real choice, that even though it was a

maddening interruption to his search for Kendrick, he must pretend
to accede. But he thought it best not to agree too readily.
"About Pittsburgh, I don't care," he said. "It's Castletown I want to
get to—and my girl."
"Ho," said Lanterman, "I'll tell you what. You join up with us and I'll
give you Castletown, all for your own. Of course, I'll still be boss of
the whole region."
Wales made another attempt for information. "I've heard of this
Brotherhood of Atonement," he said. "Are you with that outfit?"
Lanterman swore. "That bunch is crazy. No sense to 'em at all. Hell,
no, we're not Atoners."
Wales said, slowly, "Well, looks like if I and my girl decide to stay,
we'd better be in your bunch. Sure, I'll join."