Prepare the consolidation entries and a consolidation worksheet for the year ended Dec 31, 2016.

Question

Want to see more full solutions like this?

Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 6, Problem 63P

To determine

Prepare the consolidation entries and a consolidation worksheet for the year ended Dec

31, 2016.

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.

The required consolidation journal entries are as follows:

Date	Account title and Explanation	Post Ref	Debit ($)	Credit ($)
	[C] Equity Income from Subsidiary		$109,232
	Income attributable to NCI		$29,500
	Dividends-Subsidiary (common)			$20,000
	Investment in Subsidiary			$93,232
	Non-controlling Interest			$25,500

	[E] BOY Common Stock (S)		$150,000
	APIC		$170,000
	BOY Retained Earnings (S)		$225,000
	Investment in Subsidiary @ BOY			$436,000
	Non-controlling Interest @ BOY			$109,000

	[I_bond] Bond Payable net		$410,536
	Interest Income		$27,499
	Investment in Bonds (net)			$393,002
	Interest Expense			$18,732
	BOY Investment in Subsidiary			$26,301

Table (1)

An income statement that combines a parent company's revenue, expenses, and income, with its subsidiaries is known as consolidated income statement which provides an overall view of the corporation as a whole, rather than its individual parts.

A consolidated balance sheet provides a parent company's assets and liabilities and all of its subsidiaries in a legal document, without any differentiation on which items pertain to which companies. A party outside the economic unit embodied in the consolidated financial statements does not retain the equity of the shareholders of the subsidiary, and therefore should not be included in the consolidated shareholders' equities.

The consolidated worksheet for the year ended December 31, 2016 is shown below:


Income Statement	Parent	Subsidiary		Dr		Cr	Consolidated
Sales	$8,000,000	$850,000					$8,850,000
Cost of goods sold	(6,000,000)	(530,000)					(6,530,000)

Gross Profit	2,000,000	320,000					2,320,000
Operating and Other Expenses	(1,200,000)	(200,000)					(1,400,000)
Bond Interest Income		(27,499)	[I_bond]	27,499			0
Bond Interest Expense	(18,732)				[I_bond]	18,732	0
Total Expenses	(1,218,732)	(172,501)					(1,400,000)
Equity Income from Subsidiary	109,232		[C]	109,232
Consolidated net Income	$890,500	$147,499					920,000
Income attributable to NCI			[C]	29,500			(29,500)
Income attributable to Controlling Interest	$890,500	$147,499					$890,500

Statement of Retained Earnings
Beginning Retained Earnings	$5,741,500	$225,000	[E]	225,000			$5,741,500
Income attributable to Controlling Interest	890,500	147,499					890,500
Dividends declared	(284,000)	(20,000)			[C]	20,000	(284,000)
Ending retained Earnings	$6,348,000	$352,499					$6,348,000

Balance Sheet
Assets
Cash	$800,000	$350,000					$1,150,000
Accounts receivable	1,500,000	450,000					1,950,000
Inventories	2,000,000	550,000					2,550,000
Investment in subsidiary	555,533				[C]	93,232	0
					[E]	436,000
					[I_bond]	26,301
Investment in bond (net)		393,002			[I_bond]	393,002	0
PPE, net	8,240,000	950,000					9,190,000
Total Assets	$13,095,533	$2,693,002					14,840,000

Liabilities and Stockholder's Equity
Accounts payable	$700,000	$478,000					$1,178,000
Other Current liabilities	850,000	500,000					1,350,000
Bond Payable (net)	410,536		[I_bond]	410,536			0
Other long-term liabilities	836,997	1,042,503					1,879,500
Common stock	450,000	150,000	[E]	150,000			450,000
APIC	3,500,000	170,000	[E]	170,000			3,500,000
Retained Earnings	6,348,000	352,499					6,348,000
Non-controlling interest					[C]	25,500	134,500
					[E]	109,000
Total liabilities and equity	13,095,533	$2,693,002		$1,121,767		$1,121,767	$14,840,000

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

The primary objective of financial accounting is to:a) Provide management with detailed reports for decision-making.b) Help the company save taxes.c) Provide financial information to external users.d) Track inventory levels.

Need help! What is the formula for calculating the net present value (NPV) of an investment?A) Future Cash Flows × Discount RateB) Present Value of Cash Inflows - Initial InvestmentC) Internal Rate of Return - Discount RateD) Net Income / Initial Investment

Need help! In the context of accounting, "liquidity" refers to:a) The amount of cash a business hasb) The ability to pay short-term obligations as they come duec) The net income of a businessd) The profitability of a business

Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 6, Problem 63P

To determine

Prepare the consolidation entries and a consolidation worksheet for the year ended Dec

31, 2016.

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.

The required consolidation journal entries are as follows:

Date	Account title and Explanation	Post Ref	Debit ($)	Credit ($)
	[C] Equity Income from Subsidiary		$109,232
	Income attributable to NCI		$29,500
	Dividends-Subsidiary (common)			$20,000
	Investment in Subsidiary			$93,232
	Non-controlling Interest			$25,500

	[E] BOY Common Stock (S)		$150,000
	APIC		$170,000
	BOY Retained Earnings (S)		$225,000
	Investment in Subsidiary @ BOY			$436,000
	Non-controlling Interest @ BOY			$109,000

	[I_bond] Bond Payable net		$410,536
	Interest Income		$27,499
	Investment in Bonds (net)			$393,002
	Interest Expense			$18,732
	BOY Investment in Subsidiary			$26,301

Table (1)

An income statement that combines a parent company's revenue, expenses, and income, with its subsidiaries is known as consolidated income statement which provides an overall view of the corporation as a whole, rather than its individual parts.

A consolidated balance sheet provides a parent company's assets and liabilities and all of its subsidiaries in a legal document, without any differentiation on which items pertain to which companies. A party outside the economic unit embodied in the consolidated financial statements does not retain the equity of the shareholders of the subsidiary, and therefore should not be included in the consolidated shareholders' equities.

The consolidated worksheet for the year ended December 31, 2016 is shown below:


Income Statement	Parent	Subsidiary		Dr		Cr	Consolidated
Sales	$8,000,000	$850,000					$8,850,000
Cost of goods sold	(6,000,000)	(530,000)					(6,530,000)

Gross Profit	2,000,000	320,000					2,320,000
Operating and Other Expenses	(1,200,000)	(200,000)					(1,400,000)
Bond Interest Income		(27,499)	[I_bond]	27,499			0
Bond Interest Expense	(18,732)				[I_bond]	18,732	0
Total Expenses	(1,218,732)	(172,501)					(1,400,000)
Equity Income from Subsidiary	109,232		[C]	109,232
Consolidated net Income	$890,500	$147,499					920,000
Income attributable to NCI			[C]	29,500			(29,500)
Income attributable to Controlling Interest	$890,500	$147,499					$890,500

Statement of Retained Earnings
Beginning Retained Earnings	$5,741,500	$225,000	[E]	225,000			$5,741,500
Income attributable to Controlling Interest	890,500	147,499					890,500
Dividends declared	(284,000)	(20,000)			[C]	20,000	(284,000)
Ending retained Earnings	$6,348,000	$352,499					$6,348,000

Balance Sheet
Assets
Cash	$800,000	$350,000					$1,150,000
Accounts receivable	1,500,000	450,000					1,950,000
Inventories	2,000,000	550,000					2,550,000
Investment in subsidiary	555,533				[C]	93,232	0
					[E]	436,000
					[I_bond]	26,301
Investment in bond (net)		393,002			[I_bond]	393,002	0
PPE, net	8,240,000	950,000					9,190,000
Total Assets	$13,095,533	$2,693,002					14,840,000

Liabilities and Stockholder's Equity
Accounts payable	$700,000	$478,000					$1,178,000
Other Current liabilities	850,000	500,000					1,350,000
Bond Payable (net)	410,536		[I_bond]	410,536			0
Other long-term liabilities	836,997	1,042,503					1,879,500
Common stock	450,000	150,000	[E]	150,000			450,000
APIC	3,500,000	170,000	[E]	170,000			3,500,000
Retained Earnings	6,348,000	352,499					6,348,000
Non-controlling interest					[C]	25,500	134,500
					[E]	109,000
Total liabilities and equity	13,095,533	$2,693,002		$1,121,767		$1,121,767	$14,840,000

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 6, Problem 63P

To determine

Prepare the consolidation entries and a consolidation worksheet for the year ended Dec

31, 2016.

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.

The required consolidation journal entries are as follows:

Date	Account title and Explanation	Post Ref	Debit ($)	Credit ($)
	[C] Equity Income from Subsidiary		$109,232
	Income attributable to NCI		$29,500
	Dividends-Subsidiary (common)			$20,000
	Investment in Subsidiary			$93,232
	Non-controlling Interest			$25,500

	[E] BOY Common Stock (S)		$150,000
	APIC		$170,000
	BOY Retained Earnings (S)		$225,000
	Investment in Subsidiary @ BOY			$436,000
	Non-controlling Interest @ BOY			$109,000

	[I_bond] Bond Payable net		$410,536
	Interest Income		$27,499
	Investment in Bonds (net)			$393,002
	Interest Expense			$18,732
	BOY Investment in Subsidiary			$26,301

Table (1)

An income statement that combines a parent company's revenue, expenses, and income, with its subsidiaries is known as consolidated income statement which provides an overall view of the corporation as a whole, rather than its individual parts.

A consolidated balance sheet provides a parent company's assets and liabilities and all of its subsidiaries in a legal document, without any differentiation on which items pertain to which companies. A party outside the economic unit embodied in the consolidated financial statements does not retain the equity of the shareholders of the subsidiary, and therefore should not be included in the consolidated shareholders' equities.

The consolidated worksheet for the year ended December 31, 2016 is shown below:


Income Statement	Parent	Subsidiary		Dr		Cr	Consolidated
Sales	$8,000,000	$850,000					$8,850,000
Cost of goods sold	(6,000,000)	(530,000)					(6,530,000)

Gross Profit	2,000,000	320,000					2,320,000
Operating and Other Expenses	(1,200,000)	(200,000)					(1,400,000)
Bond Interest Income		(27,499)	[I_bond]	27,499			0
Bond Interest Expense	(18,732)				[I_bond]	18,732	0
Total Expenses	(1,218,732)	(172,501)					(1,400,000)
Equity Income from Subsidiary	109,232		[C]	109,232
Consolidated net Income	$890,500	$147,499					920,000
Income attributable to NCI			[C]	29,500			(29,500)
Income attributable to Controlling Interest	$890,500	$147,499					$890,500

Statement of Retained Earnings
Beginning Retained Earnings	$5,741,500	$225,000	[E]	225,000			$5,741,500
Income attributable to Controlling Interest	890,500	147,499					890,500
Dividends declared	(284,000)	(20,000)			[C]	20,000	(284,000)
Ending retained Earnings	$6,348,000	$352,499					$6,348,000

Balance Sheet
Assets
Cash	$800,000	$350,000					$1,150,000
Accounts receivable	1,500,000	450,000					1,950,000
Inventories	2,000,000	550,000					2,550,000
Investment in subsidiary	555,533				[C]	93,232	0
					[E]	436,000
					[I_bond]	26,301
Investment in bond (net)		393,002			[I_bond]	393,002	0
PPE, net	8,240,000	950,000					9,190,000
Total Assets	$13,095,533	$2,693,002					14,840,000

Liabilities and Stockholder's Equity
Accounts payable	$700,000	$478,000					$1,178,000
Other Current liabilities	850,000	500,000					1,350,000
Bond Payable (net)	410,536		[I_bond]	410,536			0
Other long-term liabilities	836,997	1,042,503					1,879,500
Common stock	450,000	150,000	[E]	150,000			450,000
APIC	3,500,000	170,000	[E]	170,000			3,500,000
Retained Earnings	6,348,000	352,499					6,348,000
Non-controlling interest					[C]	25,500	134,500
					[E]	109,000
Total liabilities and equity	13,095,533	$2,693,002		$1,121,767		$1,121,767	$14,840,000

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 6, Problem 63P

To determine

Prepare the consolidation entries and a consolidation worksheet for the year ended Dec

31, 2016.

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.

The required consolidation journal entries are as follows:

Date	Account title and Explanation	Post Ref	Debit ($)	Credit ($)
	[C] Equity Income from Subsidiary		$109,232
	Income attributable to NCI		$29,500
	Dividends-Subsidiary (common)			$20,000
	Investment in Subsidiary			$93,232
	Non-controlling Interest			$25,500

	[E] BOY Common Stock (S)		$150,000
	APIC		$170,000
	BOY Retained Earnings (S)		$225,000
	Investment in Subsidiary @ BOY			$436,000
	Non-controlling Interest @ BOY			$109,000

	[I_bond] Bond Payable net		$410,536
	Interest Income		$27,499
	Investment in Bonds (net)			$393,002
	Interest Expense			$18,732
	BOY Investment in Subsidiary			$26,301

Table (1)

An income statement that combines a parent company's revenue, expenses, and income, with its subsidiaries is known as consolidated income statement which provides an overall view of the corporation as a whole, rather than its individual parts.

A consolidated balance sheet provides a parent company's assets and liabilities and all of its subsidiaries in a legal document, without any differentiation on which items pertain to which companies. A party outside the economic unit embodied in the consolidated financial statements does not retain the equity of the shareholders of the subsidiary, and therefore should not be included in the consolidated shareholders' equities.

The consolidated worksheet for the year ended December 31, 2016 is shown below:


Income Statement	Parent	Subsidiary		Dr		Cr	Consolidated
Sales	$8,000,000	$850,000					$8,850,000
Cost of goods sold	(6,000,000)	(530,000)					(6,530,000)

Gross Profit	2,000,000	320,000					2,320,000
Operating and Other Expenses	(1,200,000)	(200,000)					(1,400,000)
Bond Interest Income		(27,499)	[I_bond]	27,499			0
Bond Interest Expense	(18,732)				[I_bond]	18,732	0
Total Expenses	(1,218,732)	(172,501)					(1,400,000)
Equity Income from Subsidiary	109,232		[C]	109,232
Consolidated net Income	$890,500	$147,499					920,000
Income attributable to NCI			[C]	29,500			(29,500)
Income attributable to Controlling Interest	$890,500	$147,499					$890,500

Statement of Retained Earnings
Beginning Retained Earnings	$5,741,500	$225,000	[E]	225,000			$5,741,500
Income attributable to Controlling Interest	890,500	147,499					890,500
Dividends declared	(284,000)	(20,000)			[C]	20,000	(284,000)
Ending retained Earnings	$6,348,000	$352,499					$6,348,000

Balance Sheet
Assets
Cash	$800,000	$350,000					$1,150,000
Accounts receivable	1,500,000	450,000					1,950,000
Inventories	2,000,000	550,000					2,550,000
Investment in subsidiary	555,533				[C]	93,232	0
					[E]	436,000
					[I_bond]	26,301
Investment in bond (net)		393,002			[I_bond]	393,002	0
PPE, net	8,240,000	950,000					9,190,000
Total Assets	$13,095,533	$2,693,002					14,840,000

Liabilities and Stockholder's Equity
Accounts payable	$700,000	$478,000					$1,178,000
Other Current liabilities	850,000	500,000					1,350,000
Bond Payable (net)	410,536		[I_bond]	410,536			0
Other long-term liabilities	836,997	1,042,503					1,879,500
Common stock	450,000	150,000	[E]	150,000			450,000
APIC	3,500,000	170,000	[E]	170,000			3,500,000
Retained Earnings	6,348,000	352,499					6,348,000
Non-controlling interest					[C]	25,500	134,500
					[E]	109,000
Total liabilities and equity	13,095,533	$2,693,002		$1,121,767		$1,121,767	$14,840,000

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 6, Problem 63P

To determine

Prepare the consolidation entries and a consolidation worksheet for the year ended Dec

31, 2016.

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.

The required consolidation journal entries are as follows:

Date	Account title and Explanation	Post Ref	Debit ($)	Credit ($)
	[C] Equity Income from Subsidiary		$109,232
	Income attributable to NCI		$29,500
	Dividends-Subsidiary (common)			$20,000
	Investment in Subsidiary			$93,232
	Non-controlling Interest			$25,500

	[E] BOY Common Stock (S)		$150,000
	APIC		$170,000
	BOY Retained Earnings (S)		$225,000
	Investment in Subsidiary @ BOY			$436,000
	Non-controlling Interest @ BOY			$109,000

	[I_bond] Bond Payable net		$410,536
	Interest Income		$27,499
	Investment in Bonds (net)			$393,002
	Interest Expense			$18,732
	BOY Investment in Subsidiary			$26,301

Table (1)

An income statement that combines a parent company's revenue, expenses, and income, with its subsidiaries is known as consolidated income statement which provides an overall view of the corporation as a whole, rather than its individual parts.

A consolidated balance sheet provides a parent company's assets and liabilities and all of its subsidiaries in a legal document, without any differentiation on which items pertain to which companies. A party outside the economic unit embodied in the consolidated financial statements does not retain the equity of the shareholders of the subsidiary, and therefore should not be included in the consolidated shareholders' equities.

The consolidated worksheet for the year ended December 31, 2016 is shown below:


Income Statement	Parent	Subsidiary		Dr		Cr	Consolidated
Sales	$8,000,000	$850,000					$8,850,000
Cost of goods sold	(6,000,000)	(530,000)					(6,530,000)

Gross Profit	2,000,000	320,000					2,320,000
Operating and Other Expenses	(1,200,000)	(200,000)					(1,400,000)
Bond Interest Income		(27,499)	[I_bond]	27,499			0
Bond Interest Expense	(18,732)				[I_bond]	18,732	0
Total Expenses	(1,218,732)	(172,501)					(1,400,000)
Equity Income from Subsidiary	109,232		[C]	109,232
Consolidated net Income	$890,500	$147,499					920,000
Income attributable to NCI			[C]	29,500			(29,500)
Income attributable to Controlling Interest	$890,500	$147,499					$890,500

Statement of Retained Earnings
Beginning Retained Earnings	$5,741,500	$225,000	[E]	225,000			$5,741,500
Income attributable to Controlling Interest	890,500	147,499					890,500
Dividends declared	(284,000)	(20,000)			[C]	20,000	(284,000)
Ending retained Earnings	$6,348,000	$352,499					$6,348,000

Balance Sheet
Assets
Cash	$800,000	$350,000					$1,150,000
Accounts receivable	1,500,000	450,000					1,950,000
Inventories	2,000,000	550,000					2,550,000
Investment in subsidiary	555,533				[C]	93,232	0
					[E]	436,000
					[I_bond]	26,301
Investment in bond (net)		393,002			[I_bond]	393,002	0
PPE, net	8,240,000	950,000					9,190,000
Total Assets	$13,095,533	$2,693,002					14,840,000

Liabilities and Stockholder's Equity
Accounts payable	$700,000	$478,000					$1,178,000
Other Current liabilities	850,000	500,000					1,350,000
Bond Payable (net)	410,536		[I_bond]	410,536			0
Other long-term liabilities	836,997	1,042,503					1,879,500
Common stock	450,000	150,000	[E]	150,000			450,000
APIC	3,500,000	170,000	[E]	170,000			3,500,000
Retained Earnings	6,348,000	352,499					6,348,000
Non-controlling interest					[C]	25,500	134,500
					[E]	109,000
Total liabilities and equity	13,095,533	$2,693,002		$1,121,767		$1,121,767	$14,840,000

Answer 6

Chapter 6, Problem 63P

To determine

Prepare the consolidation entries and a consolidation worksheet for the year ended Dec

31, 2016.

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.

The required consolidation journal entries are as follows:

Date	Account title and Explanation	Post Ref	Debit ($)	Credit ($)
	[C] Equity Income from Subsidiary		$109,232
	Income attributable to NCI		$29,500
	Dividends-Subsidiary (common)			$20,000
	Investment in Subsidiary			$93,232
	Non-controlling Interest			$25,500

	[E] BOY Common Stock (S)		$150,000
	APIC		$170,000
	BOY Retained Earnings (S)		$225,000
	Investment in Subsidiary @ BOY			$436,000
	Non-controlling Interest @ BOY			$109,000

	[I_bond] Bond Payable net		$410,536
	Interest Income		$27,499
	Investment in Bonds (net)			$393,002
	Interest Expense			$18,732
	BOY Investment in Subsidiary			$26,301

Table (1)

An income statement that combines a parent company's revenue, expenses, and income, with its subsidiaries is known as consolidated income statement which provides an overall view of the corporation as a whole, rather than its individual parts.

A consolidated balance sheet provides a parent company's assets and liabilities and all of its subsidiaries in a legal document, without any differentiation on which items pertain to which companies. A party outside the economic unit embodied in the consolidated financial statements does not retain the equity of the shareholders of the subsidiary, and therefore should not be included in the consolidated shareholders' equities.

The consolidated worksheet for the year ended December 31, 2016 is shown below:


Income Statement	Parent	Subsidiary		Dr		Cr	Consolidated
Sales	$8,000,000	$850,000					$8,850,000
Cost of goods sold	(6,000,000)	(530,000)					(6,530,000)

Gross Profit	2,000,000	320,000					2,320,000
Operating and Other Expenses	(1,200,000)	(200,000)					(1,400,000)
Bond Interest Income		(27,499)	[I_bond]	27,499			0
Bond Interest Expense	(18,732)				[I_bond]	18,732	0
Total Expenses	(1,218,732)	(172,501)					(1,400,000)
Equity Income from Subsidiary	109,232		[C]	109,232
Consolidated net Income	$890,500	$147,499					920,000
Income attributable to NCI			[C]	29,500			(29,500)
Income attributable to Controlling Interest	$890,500	$147,499					$890,500

Statement of Retained Earnings
Beginning Retained Earnings	$5,741,500	$225,000	[E]	225,000			$5,741,500
Income attributable to Controlling Interest	890,500	147,499					890,500
Dividends declared	(284,000)	(20,000)			[C]	20,000	(284,000)
Ending retained Earnings	$6,348,000	$352,499					$6,348,000

Balance Sheet
Assets
Cash	$800,000	$350,000					$1,150,000
Accounts receivable	1,500,000	450,000					1,950,000
Inventories	2,000,000	550,000					2,550,000
Investment in subsidiary	555,533				[C]	93,232	0
					[E]	436,000
					[I_bond]	26,301
Investment in bond (net)		393,002			[I_bond]	393,002	0
PPE, net	8,240,000	950,000					9,190,000
Total Assets	$13,095,533	$2,693,002					14,840,000

Liabilities and Stockholder's Equity
Accounts payable	$700,000	$478,000					$1,178,000
Other Current liabilities	850,000	500,000					1,350,000
Bond Payable (net)	410,536		[I_bond]	410,536			0
Other long-term liabilities	836,997	1,042,503					1,879,500
Common stock	450,000	150,000	[E]	150,000			450,000
APIC	3,500,000	170,000	[E]	170,000			3,500,000
Retained Earnings	6,348,000	352,499					6,348,000
Non-controlling interest					[C]	25,500	134,500
					[E]	109,000
Total liabilities and equity	13,095,533	$2,693,002		$1,121,767		$1,121,767	$14,840,000

Answer 7

Chapter 6, Problem 63P

To determine

Prepare the consolidation entries and a consolidation worksheet for the year ended Dec

31, 2016.

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.

The required consolidation journal entries are as follows:

Date	Account title and Explanation	Post Ref	Debit ($)	Credit ($)
	[C] Equity Income from Subsidiary		$109,232
	Income attributable to NCI		$29,500
	Dividends-Subsidiary (common)			$20,000
	Investment in Subsidiary			$93,232
	Non-controlling Interest			$25,500

	[E] BOY Common Stock (S)		$150,000
	APIC		$170,000
	BOY Retained Earnings (S)		$225,000
	Investment in Subsidiary @ BOY			$436,000
	Non-controlling Interest @ BOY			$109,000

	[I_bond] Bond Payable net		$410,536
	Interest Income		$27,499
	Investment in Bonds (net)			$393,002
	Interest Expense			$18,732
	BOY Investment in Subsidiary			$26,301

Table (1)

An income statement that combines a parent company's revenue, expenses, and income, with its subsidiaries is known as consolidated income statement which provides an overall view of the corporation as a whole, rather than its individual parts.

A consolidated balance sheet provides a parent company's assets and liabilities and all of its subsidiaries in a legal document, without any differentiation on which items pertain to which companies. A party outside the economic unit embodied in the consolidated financial statements does not retain the equity of the shareholders of the subsidiary, and therefore should not be included in the consolidated shareholders' equities.

The consolidated worksheet for the year ended December 31, 2016 is shown below:


Income Statement	Parent	Subsidiary		Dr		Cr	Consolidated
Sales	$8,000,000	$850,000					$8,850,000
Cost of goods sold	(6,000,000)	(530,000)					(6,530,000)

Gross Profit	2,000,000	320,000					2,320,000
Operating and Other Expenses	(1,200,000)	(200,000)					(1,400,000)
Bond Interest Income		(27,499)	[I_bond]	27,499			0
Bond Interest Expense	(18,732)				[I_bond]	18,732	0
Total Expenses	(1,218,732)	(172,501)					(1,400,000)
Equity Income from Subsidiary	109,232		[C]	109,232
Consolidated net Income	$890,500	$147,499					920,000
Income attributable to NCI			[C]	29,500			(29,500)
Income attributable to Controlling Interest	$890,500	$147,499					$890,500

Statement of Retained Earnings
Beginning Retained Earnings	$5,741,500	$225,000	[E]	225,000			$5,741,500
Income attributable to Controlling Interest	890,500	147,499					890,500
Dividends declared	(284,000)	(20,000)			[C]	20,000	(284,000)
Ending retained Earnings	$6,348,000	$352,499					$6,348,000

Balance Sheet
Assets
Cash	$800,000	$350,000					$1,150,000
Accounts receivable	1,500,000	450,000					1,950,000
Inventories	2,000,000	550,000					2,550,000
Investment in subsidiary	555,533				[C]	93,232	0
					[E]	436,000
					[I_bond]	26,301
Investment in bond (net)		393,002			[I_bond]	393,002	0
PPE, net	8,240,000	950,000					9,190,000
Total Assets	$13,095,533	$2,693,002					14,840,000

Liabilities and Stockholder's Equity
Accounts payable	$700,000	$478,000					$1,178,000
Other Current liabilities	850,000	500,000					1,350,000
Bond Payable (net)	410,536		[I_bond]	410,536			0
Other long-term liabilities	836,997	1,042,503					1,879,500
Common stock	450,000	150,000	[E]	150,000			450,000
APIC	3,500,000	170,000	[E]	170,000			3,500,000
Retained Earnings	6,348,000	352,499					6,348,000
Non-controlling interest					[C]	25,500	134,500
					[E]	109,000
Total liabilities and equity	13,095,533	$2,693,002		$1,121,767		$1,121,767	$14,840,000