Mention the reason why consolidated net income equal to the net income reported by the parent if the parent employs the accounting equity method.

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Answer 1

Question

Chapter 3, Problem 1Q

To determine

Mention the reason why consolidated net income equal to the net income reported by

the parent if the parent employs the accounting equity method.

Expert Solution & Answer

Explanation of Solution

Consolidated financial statements are a group of entities financial statements that are presented as those of a single economic entity. They are the financial statements of a group in which the parent company and its subsidiaries introduce their assets, liabilities, equity, revenue, expenses and cash flows as those of a single business organization.

Consolidated accounting is used to club a parent company's financial information and one or more subsidiaries. The parent prepares consolidated financial statements through adjustment of entries and elimination of transactions between companies. It is the process of combining the financial results of several subsidiaries into the parent company's overall financial results.

Consolidated net income is the sum of the parent company's net income exclusive of income from subsidiaries acknowledged in its specific financial statements plus its subsidiaries' net income assessed excluding the unrealized gain in inventories, intra-group income, etc. When the parent utilizes the accounting equity method, it acknowledges the subsidiary's equity income, less the depreciation and amortization of the [A] AAP net assets, on its income statement in the equity income account. This Equity Income account is removed during the consolidation process and substituted with the revenues and expenses to which it refers. Net income remains stable as we substitute the net income of the subsidiary (reported in Equity Income) with its revenues and expenses.

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Students have asked these similar questions

Gamma Industries, which applies manufacturing overhead on the basis of machine hours, has provided the following data for its most recent year of operations: Item Amount Estimated Manufacturing Overhead $540,000 Estimated Machine Hours 18,000 Actual Manufacturing Overhead $562,500 19,500 Actual Machine Hours The estimates for manufacturing overhead and machine hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year. Calculate the overhead rate for the year.

How much was over-or under-applied overhead?

None

Answer 2

Question

Chapter 3, Problem 1Q

To determine

Mention the reason why consolidated net income equal to the net income reported by

the parent if the parent employs the accounting equity method.

Expert Solution & Answer

Explanation of Solution

Consolidated financial statements are a group of entities financial statements that are presented as those of a single economic entity. They are the financial statements of a group in which the parent company and its subsidiaries introduce their assets, liabilities, equity, revenue, expenses and cash flows as those of a single business organization.

Consolidated accounting is used to club a parent company's financial information and one or more subsidiaries. The parent prepares consolidated financial statements through adjustment of entries and elimination of transactions between companies. It is the process of combining the financial results of several subsidiaries into the parent company's overall financial results.

Consolidated net income is the sum of the parent company's net income exclusive of income from subsidiaries acknowledged in its specific financial statements plus its subsidiaries' net income assessed excluding the unrealized gain in inventories, intra-group income, etc. When the parent utilizes the accounting equity method, it acknowledges the subsidiary's equity income, less the depreciation and amortization of the [A] AAP net assets, on its income statement in the equity income account. This Equity Income account is removed during the consolidation process and substituted with the revenues and expenses to which it refers. Net income remains stable as we substitute the net income of the subsidiary (reported in Equity Income) with its revenues and expenses.

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Answer 3

Question

Chapter 3, Problem 1Q

To determine

Mention the reason why consolidated net income equal to the net income reported by

the parent if the parent employs the accounting equity method.

Expert Solution & Answer

Explanation of Solution

Consolidated financial statements are a group of entities financial statements that are presented as those of a single economic entity. They are the financial statements of a group in which the parent company and its subsidiaries introduce their assets, liabilities, equity, revenue, expenses and cash flows as those of a single business organization.

Consolidated accounting is used to club a parent company's financial information and one or more subsidiaries. The parent prepares consolidated financial statements through adjustment of entries and elimination of transactions between companies. It is the process of combining the financial results of several subsidiaries into the parent company's overall financial results.

Consolidated net income is the sum of the parent company's net income exclusive of income from subsidiaries acknowledged in its specific financial statements plus its subsidiaries' net income assessed excluding the unrealized gain in inventories, intra-group income, etc. When the parent utilizes the accounting equity method, it acknowledges the subsidiary's equity income, less the depreciation and amortization of the [A] AAP net assets, on its income statement in the equity income account. This Equity Income account is removed during the consolidation process and substituted with the revenues and expenses to which it refers. Net income remains stable as we substitute the net income of the subsidiary (reported in Equity Income) with its revenues and expenses.

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Answer 4

Question

Chapter 3, Problem 1Q

To determine

Mention the reason why consolidated net income equal to the net income reported by

the parent if the parent employs the accounting equity method.

Expert Solution & Answer

Explanation of Solution

Consolidated financial statements are a group of entities financial statements that are presented as those of a single economic entity. They are the financial statements of a group in which the parent company and its subsidiaries introduce their assets, liabilities, equity, revenue, expenses and cash flows as those of a single business organization.

Consolidated accounting is used to club a parent company's financial information and one or more subsidiaries. The parent prepares consolidated financial statements through adjustment of entries and elimination of transactions between companies. It is the process of combining the financial results of several subsidiaries into the parent company's overall financial results.

Consolidated net income is the sum of the parent company's net income exclusive of income from subsidiaries acknowledged in its specific financial statements plus its subsidiaries' net income assessed excluding the unrealized gain in inventories, intra-group income, etc. When the parent utilizes the accounting equity method, it acknowledges the subsidiary's equity income, less the depreciation and amortization of the [A] AAP net assets, on its income statement in the equity income account. This Equity Income account is removed during the consolidation process and substituted with the revenues and expenses to which it refers. Net income remains stable as we substitute the net income of the subsidiary (reported in Equity Income) with its revenues and expenses.

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Answer 5

Chapter 3, Problem 1Q

To determine

Mention the reason why consolidated net income equal to the net income reported by

the parent if the parent employs the accounting equity method.

Expert Solution & Answer

Explanation of Solution

Consolidated financial statements are a group of entities financial statements that are presented as those of a single economic entity. They are the financial statements of a group in which the parent company and its subsidiaries introduce their assets, liabilities, equity, revenue, expenses and cash flows as those of a single business organization.

Consolidated accounting is used to club a parent company's financial information and one or more subsidiaries. The parent prepares consolidated financial statements through adjustment of entries and elimination of transactions between companies. It is the process of combining the financial results of several subsidiaries into the parent company's overall financial results.

Consolidated net income is the sum of the parent company's net income exclusive of income from subsidiaries acknowledged in its specific financial statements plus its subsidiaries' net income assessed excluding the unrealized gain in inventories, intra-group income, etc. When the parent utilizes the accounting equity method, it acknowledges the subsidiary's equity income, less the depreciation and amortization of the [A] AAP net assets, on its income statement in the equity income account. This Equity Income account is removed during the consolidation process and substituted with the revenues and expenses to which it refers. Net income remains stable as we substitute the net income of the subsidiary (reported in Equity Income) with its revenues and expenses.

Answer 6

Chapter 3, Problem 1Q

To determine

Mention the reason why consolidated net income equal to the net income reported by

the parent if the parent employs the accounting equity method.

Expert Solution & Answer

Explanation of Solution

Consolidated financial statements are a group of entities financial statements that are presented as those of a single economic entity. They are the financial statements of a group in which the parent company and its subsidiaries introduce their assets, liabilities, equity, revenue, expenses and cash flows as those of a single business organization.

Consolidated accounting is used to club a parent company's financial information and one or more subsidiaries. The parent prepares consolidated financial statements through adjustment of entries and elimination of transactions between companies. It is the process of combining the financial results of several subsidiaries into the parent company's overall financial results.

Consolidated net income is the sum of the parent company's net income exclusive of income from subsidiaries acknowledged in its specific financial statements plus its subsidiaries' net income assessed excluding the unrealized gain in inventories, intra-group income, etc. When the parent utilizes the accounting equity method, it acknowledges the subsidiary's equity income, less the depreciation and amortization of the [A] AAP net assets, on its income statement in the equity income account. This Equity Income account is removed during the consolidation process and substituted with the revenues and expenses to which it refers. Net income remains stable as we substitute the net income of the subsidiary (reported in Equity Income) with its revenues and expenses.

Answer 7

Chapter 3, Problem 1Q

To determine

Mention the reason why consolidated net income equal to the net income reported by

the parent if the parent employs the accounting equity method.

Answer 8

Expert Solution & Answer

Explanation of Solution

Consolidated financial statements are a group of entities financial statements that are presented as those of a single economic entity. They are the financial statements of a group in which the parent company and its subsidiaries introduce their assets, liabilities, equity, revenue, expenses and cash flows as those of a single business organization.

Consolidated accounting is used to club a parent company's financial information and one or more subsidiaries. The parent prepares consolidated financial statements through adjustment of entries and elimination of transactions between companies. It is the process of combining the financial results of several subsidiaries into the parent company's overall financial results.

Consolidated net income is the sum of the parent company's net income exclusive of income from subsidiaries acknowledged in its specific financial statements plus its subsidiaries' net income assessed excluding the unrealized gain in inventories, intra-group income, etc. When the parent utilizes the accounting equity method, it acknowledges the subsidiary's equity income, less the depreciation and amortization of the [A] AAP net assets, on its income statement in the equity income account. This Equity Income account is removed during the consolidation process and substituted with the revenues and expenses to which it refers. Net income remains stable as we substitute the net income of the subsidiary (reported in Equity Income) with its revenues and expenses.