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

Chapter 6, Problem 66P

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		$35,784
	Income attributable to NCI		$7,754
	Dividends-Subsidiary (common)			$26,000
	Investment in Subsidiary			$16,284
	Non-controlling Interest			$1,254

	[E] BOY Common Stock (S)		$60,000
	APIC		$200,000
	BOY Retained Earnings (S)		$550,000
	Investment in Subsidiary @ BOY			$607,500
	Non-controlling Interest @ BOY			$202,500

	[I_bond] Bond Payable net		$484,030
	Interest Income		$25,462
	BOY Investment in Subsidiary		$37,569
	Investment in Bonds (net)			$509,076
	Interest Expense			$37,985

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	$5,700,000	$540,000					$6,240,000
Cost of goods sold	(4,080,000)	(330,000)					(4,410,000)

Gross Profit	1,620,000	210,000					1,830,000
Operating and Other Expenses	(990,000)	(141,000)					(1,131,000)
Bond Interest Income	(25,462)		[I_bond]	25,462			0
Bond Interest Expense		(37,985)			[I_bond]	37,985	0
Total Expenses	(964,538)	(178,985)					(1,131,000)
Equity Income from Subsidiary	35,784		[C]	35,784
Consolidated net Income	$691,246	$31,015					699,000
Income attributable to NCI			[C]	7,754			(7,754)
Income attributable to Controlling Interest	$691,246	$31,015					$691,246

Statement of Retained Earnings
Beginning Retained Earnings	$2,973,000	$550,000	[E]	550,000			$2,973,000
Income attributable to Controlling Interest	691,246	31,015					691,246
Dividends declared	(800,000)	(26,000)			[C]	26,000	(800,000)
Ending retained Earnings	$2,864,246	$555,015					2,864,246

Balance Sheet
Assets
Cash	$528,955	$269,045					$798,000
Accounts receivable	900,000	440,000					1,340,000
Inventories	1,400,000	560,000					1,960,000
Investment in subsidiary	586,215		[I_bond]	37,569	[C]	16,284	0
					[E]	607,500
					[I_bond]	509,076
Investment in bond (net)	509,076						0
PPE, net	4,450,000	900,000					5,350,000
Total Assets	$8,374,246	$2,169,045					9,448,000

Liabilities and Stockholder's Equity
Accounts payable	$850,000	$270,000					$1,120,000
Other Current liabilities	750,000	300,000					1,050,000
Bond Payable (net)		484,030	[I_bond]	484,030			-
Other long-term liabilities	940,000	300,000					1,240,000
Common stock	510,000	60,000	[E]	60,000			510,000
APIC	2,460,000	200,000	[E]	200,000			2,460,000
Retained Earnings	2,864,246	555,015					2,864,246
Non-controlling interest					[C]	1,254	203,754
					[E]	202,500
Total liabilities and equity	$8,374,246	$2,169,045		$1,400,599		$1,400,599	$9,448,000

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

Scarce resource; discontinued product lines; negative contribution marginThe officers of Bardwell Company are reviewing the profitability of the company’s four products and the potential effects of several proposals for varying the product mix. The following is an excerpt from the income statement and other data. Total Product P Product Q Product R Product S Sales $62,600 $10,000 $18,000 $12,600 $22,000 Cost of goods sold (44,274) (4,750) (7,056) (13,968) (18,500) Gross profit $18,326 $5,250 $10,944 $(1,368) $3,500 Operating expenses (12,004) (1,990) (2,968) (2,826) (4,220) Income before taxes 6,322 $3,260 $7,976 $(4,194) $(720) Units sold 1,000 1,200 1,800 2,000 Sales price per unit $10.00 $15.00 $7.00 $11.00 Variable cost of goods sold 2.50 3.00 6.50 6.00 Variable operating expenses 1.17 1.25 1.00 1.20 Each of the following proposals is to be considered independently of the other proposals. Consider only the product changes stated in each…

Analyzing one company's make or buy and special order proposals OneCo is a retail organization in the Northeast that sells upscale clothing. Each year, store managers (in consultation with their supervisors) establish financial goals; a monthly reporting system captures actual performance. OneCo Inc. produces a single product. Cost per unit, based on the manufacture and sale of 10,000 units per month at full capacity, is shown below. Product costs Direct materials $4.00 Direct labor 1.30 Variable overhead 2.50 Fixed overhead 3.40 Sales commission 0.90 $12.10 The $0.90 sales commission is paid for every unit sold through regular channels. Market demand is such that OneCo is operating at full capacity, and the firm has found it can sell all it can produce at the market price of $16.50. Currently, OneCo is considering two separate proposals: · Gatsby, Inc. has offered to buy 1,000 units at $14.35 each. Sales commission would be $0.35 on this special order. ·…

MYS App Ch 1 M Ques M X Chat Use ta gaut Soluta acco a webs a wear a acco calcuTelesa Requ /ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fconnect.mheducation.com%252Fconnect ework i ces Saved [The following information applies to the questions displayed below.] The first production department in a process manufacturing system reports the following unit data. Beginning work in process inventory Units started and completed 35,200 units 52,800 units Units completed and transferred out Ending work in process inventory 88,000 units 17,900 units Help Save & Exercise 16-4 (Algo) Weighted average: Computing equivalent units LO P1 Prepare the production department's equivalent units of production for direct materials under each of the following three separate assumptions using the weighted average method for process costing. Equivalent Units of Production (EUP)-Weighted Average Method 1. All direct materials are added to products when…

Answer 2

Question

Chapter 6, Problem 66P

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		$35,784
	Income attributable to NCI		$7,754
	Dividends-Subsidiary (common)			$26,000
	Investment in Subsidiary			$16,284
	Non-controlling Interest			$1,254

	[E] BOY Common Stock (S)		$60,000
	APIC		$200,000
	BOY Retained Earnings (S)		$550,000
	Investment in Subsidiary @ BOY			$607,500
	Non-controlling Interest @ BOY			$202,500

	[I_bond] Bond Payable net		$484,030
	Interest Income		$25,462
	BOY Investment in Subsidiary		$37,569
	Investment in Bonds (net)			$509,076
	Interest Expense			$37,985

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	$5,700,000	$540,000					$6,240,000
Cost of goods sold	(4,080,000)	(330,000)					(4,410,000)

Gross Profit	1,620,000	210,000					1,830,000
Operating and Other Expenses	(990,000)	(141,000)					(1,131,000)
Bond Interest Income	(25,462)		[I_bond]	25,462			0
Bond Interest Expense		(37,985)			[I_bond]	37,985	0
Total Expenses	(964,538)	(178,985)					(1,131,000)
Equity Income from Subsidiary	35,784		[C]	35,784
Consolidated net Income	$691,246	$31,015					699,000
Income attributable to NCI			[C]	7,754			(7,754)
Income attributable to Controlling Interest	$691,246	$31,015					$691,246

Statement of Retained Earnings
Beginning Retained Earnings	$2,973,000	$550,000	[E]	550,000			$2,973,000
Income attributable to Controlling Interest	691,246	31,015					691,246
Dividends declared	(800,000)	(26,000)			[C]	26,000	(800,000)
Ending retained Earnings	$2,864,246	$555,015					2,864,246

Balance Sheet
Assets
Cash	$528,955	$269,045					$798,000
Accounts receivable	900,000	440,000					1,340,000
Inventories	1,400,000	560,000					1,960,000
Investment in subsidiary	586,215		[I_bond]	37,569	[C]	16,284	0
					[E]	607,500
					[I_bond]	509,076
Investment in bond (net)	509,076						0
PPE, net	4,450,000	900,000					5,350,000
Total Assets	$8,374,246	$2,169,045					9,448,000

Liabilities and Stockholder's Equity
Accounts payable	$850,000	$270,000					$1,120,000
Other Current liabilities	750,000	300,000					1,050,000
Bond Payable (net)		484,030	[I_bond]	484,030			-
Other long-term liabilities	940,000	300,000					1,240,000
Common stock	510,000	60,000	[E]	60,000			510,000
APIC	2,460,000	200,000	[E]	200,000			2,460,000
Retained Earnings	2,864,246	555,015					2,864,246
Non-controlling interest					[C]	1,254	203,754
					[E]	202,500
Total liabilities and equity	$8,374,246	$2,169,045		$1,400,599		$1,400,599	$9,448,000

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

Chapter 6, Problem 66P

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		$35,784
	Income attributable to NCI		$7,754
	Dividends-Subsidiary (common)			$26,000
	Investment in Subsidiary			$16,284
	Non-controlling Interest			$1,254

	[E] BOY Common Stock (S)		$60,000
	APIC		$200,000
	BOY Retained Earnings (S)		$550,000
	Investment in Subsidiary @ BOY			$607,500
	Non-controlling Interest @ BOY			$202,500

	[I_bond] Bond Payable net		$484,030
	Interest Income		$25,462
	BOY Investment in Subsidiary		$37,569
	Investment in Bonds (net)			$509,076
	Interest Expense			$37,985

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	$5,700,000	$540,000					$6,240,000
Cost of goods sold	(4,080,000)	(330,000)					(4,410,000)

Gross Profit	1,620,000	210,000					1,830,000
Operating and Other Expenses	(990,000)	(141,000)					(1,131,000)
Bond Interest Income	(25,462)		[I_bond]	25,462			0
Bond Interest Expense		(37,985)			[I_bond]	37,985	0
Total Expenses	(964,538)	(178,985)					(1,131,000)
Equity Income from Subsidiary	35,784		[C]	35,784
Consolidated net Income	$691,246	$31,015					699,000
Income attributable to NCI			[C]	7,754			(7,754)
Income attributable to Controlling Interest	$691,246	$31,015					$691,246

Statement of Retained Earnings
Beginning Retained Earnings	$2,973,000	$550,000	[E]	550,000			$2,973,000
Income attributable to Controlling Interest	691,246	31,015					691,246
Dividends declared	(800,000)	(26,000)			[C]	26,000	(800,000)
Ending retained Earnings	$2,864,246	$555,015					2,864,246

Balance Sheet
Assets
Cash	$528,955	$269,045					$798,000
Accounts receivable	900,000	440,000					1,340,000
Inventories	1,400,000	560,000					1,960,000
Investment in subsidiary	586,215		[I_bond]	37,569	[C]	16,284	0
					[E]	607,500
					[I_bond]	509,076
Investment in bond (net)	509,076						0
PPE, net	4,450,000	900,000					5,350,000
Total Assets	$8,374,246	$2,169,045					9,448,000

Liabilities and Stockholder's Equity
Accounts payable	$850,000	$270,000					$1,120,000
Other Current liabilities	750,000	300,000					1,050,000
Bond Payable (net)		484,030	[I_bond]	484,030			-
Other long-term liabilities	940,000	300,000					1,240,000
Common stock	510,000	60,000	[E]	60,000			510,000
APIC	2,460,000	200,000	[E]	200,000			2,460,000
Retained Earnings	2,864,246	555,015					2,864,246
Non-controlling interest					[C]	1,254	203,754
					[E]	202,500
Total liabilities and equity	$8,374,246	$2,169,045		$1,400,599		$1,400,599	$9,448,000

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

Chapter 6, Problem 66P

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		$35,784
	Income attributable to NCI		$7,754
	Dividends-Subsidiary (common)			$26,000
	Investment in Subsidiary			$16,284
	Non-controlling Interest			$1,254

	[E] BOY Common Stock (S)		$60,000
	APIC		$200,000
	BOY Retained Earnings (S)		$550,000
	Investment in Subsidiary @ BOY			$607,500
	Non-controlling Interest @ BOY			$202,500

	[I_bond] Bond Payable net		$484,030
	Interest Income		$25,462
	BOY Investment in Subsidiary		$37,569
	Investment in Bonds (net)			$509,076
	Interest Expense			$37,985

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	$5,700,000	$540,000					$6,240,000
Cost of goods sold	(4,080,000)	(330,000)					(4,410,000)

Gross Profit	1,620,000	210,000					1,830,000
Operating and Other Expenses	(990,000)	(141,000)					(1,131,000)
Bond Interest Income	(25,462)		[I_bond]	25,462			0
Bond Interest Expense		(37,985)			[I_bond]	37,985	0
Total Expenses	(964,538)	(178,985)					(1,131,000)
Equity Income from Subsidiary	35,784		[C]	35,784
Consolidated net Income	$691,246	$31,015					699,000
Income attributable to NCI			[C]	7,754			(7,754)
Income attributable to Controlling Interest	$691,246	$31,015					$691,246

Statement of Retained Earnings
Beginning Retained Earnings	$2,973,000	$550,000	[E]	550,000			$2,973,000
Income attributable to Controlling Interest	691,246	31,015					691,246
Dividends declared	(800,000)	(26,000)			[C]	26,000	(800,000)
Ending retained Earnings	$2,864,246	$555,015					2,864,246

Balance Sheet
Assets
Cash	$528,955	$269,045					$798,000
Accounts receivable	900,000	440,000					1,340,000
Inventories	1,400,000	560,000					1,960,000
Investment in subsidiary	586,215		[I_bond]	37,569	[C]	16,284	0
					[E]	607,500
					[I_bond]	509,076
Investment in bond (net)	509,076						0
PPE, net	4,450,000	900,000					5,350,000
Total Assets	$8,374,246	$2,169,045					9,448,000

Liabilities and Stockholder's Equity
Accounts payable	$850,000	$270,000					$1,120,000
Other Current liabilities	750,000	300,000					1,050,000
Bond Payable (net)		484,030	[I_bond]	484,030			-
Other long-term liabilities	940,000	300,000					1,240,000
Common stock	510,000	60,000	[E]	60,000			510,000
APIC	2,460,000	200,000	[E]	200,000			2,460,000
Retained Earnings	2,864,246	555,015					2,864,246
Non-controlling interest					[C]	1,254	203,754
					[E]	202,500
Total liabilities and equity	$8,374,246	$2,169,045		$1,400,599		$1,400,599	$9,448,000

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 66P

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		$35,784
	Income attributable to NCI		$7,754
	Dividends-Subsidiary (common)			$26,000
	Investment in Subsidiary			$16,284
	Non-controlling Interest			$1,254

	[E] BOY Common Stock (S)		$60,000
	APIC		$200,000
	BOY Retained Earnings (S)		$550,000
	Investment in Subsidiary @ BOY			$607,500
	Non-controlling Interest @ BOY			$202,500

	[I_bond] Bond Payable net		$484,030
	Interest Income		$25,462
	BOY Investment in Subsidiary		$37,569
	Investment in Bonds (net)			$509,076
	Interest Expense			$37,985

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	$5,700,000	$540,000					$6,240,000
Cost of goods sold	(4,080,000)	(330,000)					(4,410,000)

Gross Profit	1,620,000	210,000					1,830,000
Operating and Other Expenses	(990,000)	(141,000)					(1,131,000)
Bond Interest Income	(25,462)		[I_bond]	25,462			0
Bond Interest Expense		(37,985)			[I_bond]	37,985	0
Total Expenses	(964,538)	(178,985)					(1,131,000)
Equity Income from Subsidiary	35,784		[C]	35,784
Consolidated net Income	$691,246	$31,015					699,000
Income attributable to NCI			[C]	7,754			(7,754)
Income attributable to Controlling Interest	$691,246	$31,015					$691,246

Statement of Retained Earnings
Beginning Retained Earnings	$2,973,000	$550,000	[E]	550,000			$2,973,000
Income attributable to Controlling Interest	691,246	31,015					691,246
Dividends declared	(800,000)	(26,000)			[C]	26,000	(800,000)
Ending retained Earnings	$2,864,246	$555,015					2,864,246

Balance Sheet
Assets
Cash	$528,955	$269,045					$798,000
Accounts receivable	900,000	440,000					1,340,000
Inventories	1,400,000	560,000					1,960,000
Investment in subsidiary	586,215		[I_bond]	37,569	[C]	16,284	0
					[E]	607,500
					[I_bond]	509,076
Investment in bond (net)	509,076						0
PPE, net	4,450,000	900,000					5,350,000
Total Assets	$8,374,246	$2,169,045					9,448,000

Liabilities and Stockholder's Equity
Accounts payable	$850,000	$270,000					$1,120,000
Other Current liabilities	750,000	300,000					1,050,000
Bond Payable (net)		484,030	[I_bond]	484,030			-
Other long-term liabilities	940,000	300,000					1,240,000
Common stock	510,000	60,000	[E]	60,000			510,000
APIC	2,460,000	200,000	[E]	200,000			2,460,000
Retained Earnings	2,864,246	555,015					2,864,246
Non-controlling interest					[C]	1,254	203,754
					[E]	202,500
Total liabilities and equity	$8,374,246	$2,169,045		$1,400,599		$1,400,599	$9,448,000

Answer 6

Chapter 6, Problem 66P

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		$35,784
	Income attributable to NCI		$7,754
	Dividends-Subsidiary (common)			$26,000
	Investment in Subsidiary			$16,284
	Non-controlling Interest			$1,254

	[E] BOY Common Stock (S)		$60,000
	APIC		$200,000
	BOY Retained Earnings (S)		$550,000
	Investment in Subsidiary @ BOY			$607,500
	Non-controlling Interest @ BOY			$202,500

	[I_bond] Bond Payable net		$484,030
	Interest Income		$25,462
	BOY Investment in Subsidiary		$37,569
	Investment in Bonds (net)			$509,076
	Interest Expense			$37,985

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	$5,700,000	$540,000					$6,240,000
Cost of goods sold	(4,080,000)	(330,000)					(4,410,000)

Gross Profit	1,620,000	210,000					1,830,000
Operating and Other Expenses	(990,000)	(141,000)					(1,131,000)
Bond Interest Income	(25,462)		[I_bond]	25,462			0
Bond Interest Expense		(37,985)			[I_bond]	37,985	0
Total Expenses	(964,538)	(178,985)					(1,131,000)
Equity Income from Subsidiary	35,784		[C]	35,784
Consolidated net Income	$691,246	$31,015					699,000
Income attributable to NCI			[C]	7,754			(7,754)
Income attributable to Controlling Interest	$691,246	$31,015					$691,246

Statement of Retained Earnings
Beginning Retained Earnings	$2,973,000	$550,000	[E]	550,000			$2,973,000
Income attributable to Controlling Interest	691,246	31,015					691,246
Dividends declared	(800,000)	(26,000)			[C]	26,000	(800,000)
Ending retained Earnings	$2,864,246	$555,015					2,864,246

Balance Sheet
Assets
Cash	$528,955	$269,045					$798,000
Accounts receivable	900,000	440,000					1,340,000
Inventories	1,400,000	560,000					1,960,000
Investment in subsidiary	586,215		[I_bond]	37,569	[C]	16,284	0
					[E]	607,500
					[I_bond]	509,076
Investment in bond (net)	509,076						0
PPE, net	4,450,000	900,000					5,350,000
Total Assets	$8,374,246	$2,169,045					9,448,000

Liabilities and Stockholder's Equity
Accounts payable	$850,000	$270,000					$1,120,000
Other Current liabilities	750,000	300,000					1,050,000
Bond Payable (net)		484,030	[I_bond]	484,030			-
Other long-term liabilities	940,000	300,000					1,240,000
Common stock	510,000	60,000	[E]	60,000			510,000
APIC	2,460,000	200,000	[E]	200,000			2,460,000
Retained Earnings	2,864,246	555,015					2,864,246
Non-controlling interest					[C]	1,254	203,754
					[E]	202,500
Total liabilities and equity	$8,374,246	$2,169,045		$1,400,599		$1,400,599	$9,448,000

Answer 7

Chapter 6, Problem 66P

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		$35,784
	Income attributable to NCI		$7,754
	Dividends-Subsidiary (common)			$26,000
	Investment in Subsidiary			$16,284
	Non-controlling Interest			$1,254

	[E] BOY Common Stock (S)		$60,000
	APIC		$200,000
	BOY Retained Earnings (S)		$550,000
	Investment in Subsidiary @ BOY			$607,500
	Non-controlling Interest @ BOY			$202,500

	[I_bond] Bond Payable net		$484,030
	Interest Income		$25,462
	BOY Investment in Subsidiary		$37,569
	Investment in Bonds (net)			$509,076
	Interest Expense			$37,985

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	$5,700,000	$540,000					$6,240,000
Cost of goods sold	(4,080,000)	(330,000)					(4,410,000)

Gross Profit	1,620,000	210,000					1,830,000
Operating and Other Expenses	(990,000)	(141,000)					(1,131,000)
Bond Interest Income	(25,462)		[I_bond]	25,462			0
Bond Interest Expense		(37,985)			[I_bond]	37,985	0
Total Expenses	(964,538)	(178,985)					(1,131,000)
Equity Income from Subsidiary	35,784		[C]	35,784
Consolidated net Income	$691,246	$31,015					699,000
Income attributable to NCI			[C]	7,754			(7,754)
Income attributable to Controlling Interest	$691,246	$31,015					$691,246

Statement of Retained Earnings
Beginning Retained Earnings	$2,973,000	$550,000	[E]	550,000			$2,973,000
Income attributable to Controlling Interest	691,246	31,015					691,246
Dividends declared	(800,000)	(26,000)			[C]	26,000	(800,000)
Ending retained Earnings	$2,864,246	$555,015					2,864,246

Balance Sheet
Assets
Cash	$528,955	$269,045					$798,000
Accounts receivable	900,000	440,000					1,340,000
Inventories	1,400,000	560,000					1,960,000
Investment in subsidiary	586,215		[I_bond]	37,569	[C]	16,284	0
					[E]	607,500
					[I_bond]	509,076
Investment in bond (net)	509,076						0
PPE, net	4,450,000	900,000					5,350,000
Total Assets	$8,374,246	$2,169,045					9,448,000

Liabilities and Stockholder's Equity
Accounts payable	$850,000	$270,000					$1,120,000
Other Current liabilities	750,000	300,000					1,050,000
Bond Payable (net)		484,030	[I_bond]	484,030			-
Other long-term liabilities	940,000	300,000					1,240,000
Common stock	510,000	60,000	[E]	60,000			510,000
APIC	2,460,000	200,000	[E]	200,000			2,460,000
Retained Earnings	2,864,246	555,015					2,864,246
Non-controlling interest					[C]	1,254	203,754
					[E]	202,500
Total liabilities and equity	$8,374,246	$2,169,045		$1,400,599		$1,400,599	$9,448,000