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

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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 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

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Problem No. 2 The trial balance of Cleint Lumanao Nacho Supplies on February 10, 2025, before accepting Shila Tajonera as partner is shown as follows: Account Title Debit Credit Ato Cash reening smuo P 100,000 Accounts Receivable 250,000 Allowance for Uncollectible Accounts P 20,000 o Merchandise Inventory Equipment Accumulated Depreciation Accounts Payable Notes Payable 120,000 275,000 55,000 50,000 82,000 538,000 Lumanao, Capital Total P 745,000 P 745,000 Tajonera offered to invest cash to get a capital credit equal to one-half of Lumanao's capital after giving effect to the adjustments below. Lumanao accepted the offer. Valuation of some of the assets and liabilities of Lumanao, as agreed by the partners, are the following: • The merchandise is to be valued at P93,000. The accounts receivable is estimated to be 90% collectible. • The equipment is to be valued at P200,000. The partners also agreed that the name of the partnership will be Nacho Business. Required: 1. In the books of…

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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 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

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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 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

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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 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

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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