Prepare the consolidation entries and a consolidation worksheet for the year ended Dec 31, 2019.

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 67P

To determine

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

31, 2019.

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 ($)	Credit ($)
	[ADJ] Investment in Subsidiary		$118,500
	Beg. Retained Earnings (P)			$118,500

	[C] Equity Income from Subsidiary		$30,000
	Income attributable to NCI		$27,000
	Dividends-Subsidiary (common)			$40,000
	Non-controlling Interest			$17,000

	[E] BOY Common Stock (S)		$150,000
	APIC		$500,000
	BOY Retained Earnings (S)		$276,000
	Investment in Subsidiary @ BOY			$694,500
	Non-controlling Interest @ BOY			$231,500

	[I_bond] Bond Payable net		$756,000
	Interest Income		$50,000
	Investment in Bonds (net)			$740,000
	Interest Expense			$42,000
	BOY Investment in Subsidiary			$24,000

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, 2019 is shown below:


Income Statement	Parent	Subsidiary		Dr		Cr	Consolidated
Sales	$6,500,000	$800,000					$7,300,000
Cost of goods sold	(4,500,000)	(450,000)					(4,950,000)

Gross Profit	2,000,000	350,000					2,350,000
Operating and Other Expenses	(1,500,000)	(200,000)					(1,700,000)
Bond Interest Income	50,000		[I_bond]	50,000			0
Bond Interest Expense		(42,000)			[I_bond]	42,000	0
Total Expenses	(1,450,000)	(242,000)					(1,700,000)
Equity Income from Subsidiary	30,000		[C]	30,000
Consolidated net Income	$580,000	$108,000					650,000
Income attributable to NCI			[C]	27,000			(27,000)
Income attributable to Controlling Interest	$580,000	$108,000					$623,000

Statement of Retained Earnings
Beginning Retained Earnings	$760,000	$276,000	[E]	276,000	[ADJ]	118,500	$878,500
Income attributable to Controlling Interest	580,000	108,000					623,000
Dividends declared	(200,000)	(40,000)			[C]	40,000	(200,000)
Ending retained Earnings	$1,140,000	$344,000					$1,301,500

Balance Sheet
Assets
Cash	$700,000	$300,000					$1,000,000
Accounts receivable	800,000	500,000					1,300,000
Inventories	1,000,000	800,000					1,800,000
Investment in subsidiary	600,000		[ADJ]	118,500	[E]	694,500	0
					[I_bond]	24,000
					[I_bond]	740,000
Investment in bond (net)	740,000						0
PPE, net	3,000,000	1,250,000					4,250,000
Total Assets	$6,840,000	$2,850,000					8,350,000

Liabilities and Stockholder's Equity
Accounts payable	$800,000	$250,000					$1,050,000
Other Current liabilities	900,000	400,000					1,300,000
Bond Payable (net)		756,000	[I_bond]	756,000			-
Other long-term liabilities	1,400,000	450,000					1,850,000
Common stock	600,000	150,000	[E]	150,000			600,000
APIC	2,000,000	500,000	[E]	500,000			2,000,000
Retained Earnings	1,140,000	344,000					1,301,500
Non-controlling interest					[C]	17,000	248,500
					[E]	231,500
Total liabilities and equity	$6,840,000	2,850,000		$1,907,500		$1,907,500	$8,350,000

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

Determine the following requirements of this financial accounting question

Provide correct answer this financial accounting question

Chapter 15 Homework 13 Saved Help Save & Exit Submit Part 1 of 2 0.83 points eBook Ask Required information Use the following information to answer questions. (Algo) [The following information applies to the questions displayed below.] Information on Kwon Manufacturing's activities for its first month of operations follows: a. Purchased $100,800 of raw materials on credit. b. Materials requisitions show the following materials used for the month. Job 201 Job 202 Total direct materials Indirect materials Total materials used $ 49,000 24,400 73,400 9,420 $ 82,820 c. Time tickets show the following labor used for the month. Print References Job 201 $ 40,000 Job 202 13,400 Total direct labor 53,400 25,000 $ 78,400 Indirect labor Total labor used d. Applied overhead to Job 201 and to Job 202 using a predetermined overhead rate of 80% of direct materials cost. e. Transferred Job 201 to Finished Goods Inventory. f. Sold Job 201 for $166,160 on credit. g. Incurred the following actual other…

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 67P

To determine

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

31, 2019.

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 ($)	Credit ($)
	[ADJ] Investment in Subsidiary		$118,500
	Beg. Retained Earnings (P)			$118,500

	[C] Equity Income from Subsidiary		$30,000
	Income attributable to NCI		$27,000
	Dividends-Subsidiary (common)			$40,000
	Non-controlling Interest			$17,000

	[E] BOY Common Stock (S)		$150,000
	APIC		$500,000
	BOY Retained Earnings (S)		$276,000
	Investment in Subsidiary @ BOY			$694,500
	Non-controlling Interest @ BOY			$231,500

	[I_bond] Bond Payable net		$756,000
	Interest Income		$50,000
	Investment in Bonds (net)			$740,000
	Interest Expense			$42,000
	BOY Investment in Subsidiary			$24,000

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, 2019 is shown below:


Income Statement	Parent	Subsidiary		Dr		Cr	Consolidated
Sales	$6,500,000	$800,000					$7,300,000
Cost of goods sold	(4,500,000)	(450,000)					(4,950,000)

Gross Profit	2,000,000	350,000					2,350,000
Operating and Other Expenses	(1,500,000)	(200,000)					(1,700,000)
Bond Interest Income	50,000		[I_bond]	50,000			0
Bond Interest Expense		(42,000)			[I_bond]	42,000	0
Total Expenses	(1,450,000)	(242,000)					(1,700,000)
Equity Income from Subsidiary	30,000		[C]	30,000
Consolidated net Income	$580,000	$108,000					650,000
Income attributable to NCI			[C]	27,000			(27,000)
Income attributable to Controlling Interest	$580,000	$108,000					$623,000

Statement of Retained Earnings
Beginning Retained Earnings	$760,000	$276,000	[E]	276,000	[ADJ]	118,500	$878,500
Income attributable to Controlling Interest	580,000	108,000					623,000
Dividends declared	(200,000)	(40,000)			[C]	40,000	(200,000)
Ending retained Earnings	$1,140,000	$344,000					$1,301,500

Balance Sheet
Assets
Cash	$700,000	$300,000					$1,000,000
Accounts receivable	800,000	500,000					1,300,000
Inventories	1,000,000	800,000					1,800,000
Investment in subsidiary	600,000		[ADJ]	118,500	[E]	694,500	0
					[I_bond]	24,000
					[I_bond]	740,000
Investment in bond (net)	740,000						0
PPE, net	3,000,000	1,250,000					4,250,000
Total Assets	$6,840,000	$2,850,000					8,350,000

Liabilities and Stockholder's Equity
Accounts payable	$800,000	$250,000					$1,050,000
Other Current liabilities	900,000	400,000					1,300,000
Bond Payable (net)		756,000	[I_bond]	756,000			-
Other long-term liabilities	1,400,000	450,000					1,850,000
Common stock	600,000	150,000	[E]	150,000			600,000
APIC	2,000,000	500,000	[E]	500,000			2,000,000
Retained Earnings	1,140,000	344,000					1,301,500
Non-controlling interest					[C]	17,000	248,500
					[E]	231,500
Total liabilities and equity	$6,840,000	2,850,000		$1,907,500		$1,907,500	$8,350,000

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 67P

To determine

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

31, 2019.

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 ($)	Credit ($)
	[ADJ] Investment in Subsidiary		$118,500
	Beg. Retained Earnings (P)			$118,500

	[C] Equity Income from Subsidiary		$30,000
	Income attributable to NCI		$27,000
	Dividends-Subsidiary (common)			$40,000
	Non-controlling Interest			$17,000

	[E] BOY Common Stock (S)		$150,000
	APIC		$500,000
	BOY Retained Earnings (S)		$276,000
	Investment in Subsidiary @ BOY			$694,500
	Non-controlling Interest @ BOY			$231,500

	[I_bond] Bond Payable net		$756,000
	Interest Income		$50,000
	Investment in Bonds (net)			$740,000
	Interest Expense			$42,000
	BOY Investment in Subsidiary			$24,000

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, 2019 is shown below:


Income Statement	Parent	Subsidiary		Dr		Cr	Consolidated
Sales	$6,500,000	$800,000					$7,300,000
Cost of goods sold	(4,500,000)	(450,000)					(4,950,000)

Gross Profit	2,000,000	350,000					2,350,000
Operating and Other Expenses	(1,500,000)	(200,000)					(1,700,000)
Bond Interest Income	50,000		[I_bond]	50,000			0
Bond Interest Expense		(42,000)			[I_bond]	42,000	0
Total Expenses	(1,450,000)	(242,000)					(1,700,000)
Equity Income from Subsidiary	30,000		[C]	30,000
Consolidated net Income	$580,000	$108,000					650,000
Income attributable to NCI			[C]	27,000			(27,000)
Income attributable to Controlling Interest	$580,000	$108,000					$623,000

Statement of Retained Earnings
Beginning Retained Earnings	$760,000	$276,000	[E]	276,000	[ADJ]	118,500	$878,500
Income attributable to Controlling Interest	580,000	108,000					623,000
Dividends declared	(200,000)	(40,000)			[C]	40,000	(200,000)
Ending retained Earnings	$1,140,000	$344,000					$1,301,500

Balance Sheet
Assets
Cash	$700,000	$300,000					$1,000,000
Accounts receivable	800,000	500,000					1,300,000
Inventories	1,000,000	800,000					1,800,000
Investment in subsidiary	600,000		[ADJ]	118,500	[E]	694,500	0
					[I_bond]	24,000
					[I_bond]	740,000
Investment in bond (net)	740,000						0
PPE, net	3,000,000	1,250,000					4,250,000
Total Assets	$6,840,000	$2,850,000					8,350,000

Liabilities and Stockholder's Equity
Accounts payable	$800,000	$250,000					$1,050,000
Other Current liabilities	900,000	400,000					1,300,000
Bond Payable (net)		756,000	[I_bond]	756,000			-
Other long-term liabilities	1,400,000	450,000					1,850,000
Common stock	600,000	150,000	[E]	150,000			600,000
APIC	2,000,000	500,000	[E]	500,000			2,000,000
Retained Earnings	1,140,000	344,000					1,301,500
Non-controlling interest					[C]	17,000	248,500
					[E]	231,500
Total liabilities and equity	$6,840,000	2,850,000		$1,907,500		$1,907,500	$8,350,000

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 67P

To determine

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

31, 2019.

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 ($)	Credit ($)
	[ADJ] Investment in Subsidiary		$118,500
	Beg. Retained Earnings (P)			$118,500

	[C] Equity Income from Subsidiary		$30,000
	Income attributable to NCI		$27,000
	Dividends-Subsidiary (common)			$40,000
	Non-controlling Interest			$17,000

	[E] BOY Common Stock (S)		$150,000
	APIC		$500,000
	BOY Retained Earnings (S)		$276,000
	Investment in Subsidiary @ BOY			$694,500
	Non-controlling Interest @ BOY			$231,500

	[I_bond] Bond Payable net		$756,000
	Interest Income		$50,000
	Investment in Bonds (net)			$740,000
	Interest Expense			$42,000
	BOY Investment in Subsidiary			$24,000

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, 2019 is shown below:


Income Statement	Parent	Subsidiary		Dr		Cr	Consolidated
Sales	$6,500,000	$800,000					$7,300,000
Cost of goods sold	(4,500,000)	(450,000)					(4,950,000)

Gross Profit	2,000,000	350,000					2,350,000
Operating and Other Expenses	(1,500,000)	(200,000)					(1,700,000)
Bond Interest Income	50,000		[I_bond]	50,000			0
Bond Interest Expense		(42,000)			[I_bond]	42,000	0
Total Expenses	(1,450,000)	(242,000)					(1,700,000)
Equity Income from Subsidiary	30,000		[C]	30,000
Consolidated net Income	$580,000	$108,000					650,000
Income attributable to NCI			[C]	27,000			(27,000)
Income attributable to Controlling Interest	$580,000	$108,000					$623,000

Statement of Retained Earnings
Beginning Retained Earnings	$760,000	$276,000	[E]	276,000	[ADJ]	118,500	$878,500
Income attributable to Controlling Interest	580,000	108,000					623,000
Dividends declared	(200,000)	(40,000)			[C]	40,000	(200,000)
Ending retained Earnings	$1,140,000	$344,000					$1,301,500

Balance Sheet
Assets
Cash	$700,000	$300,000					$1,000,000
Accounts receivable	800,000	500,000					1,300,000
Inventories	1,000,000	800,000					1,800,000
Investment in subsidiary	600,000		[ADJ]	118,500	[E]	694,500	0
					[I_bond]	24,000
					[I_bond]	740,000
Investment in bond (net)	740,000						0
PPE, net	3,000,000	1,250,000					4,250,000
Total Assets	$6,840,000	$2,850,000					8,350,000

Liabilities and Stockholder's Equity
Accounts payable	$800,000	$250,000					$1,050,000
Other Current liabilities	900,000	400,000					1,300,000
Bond Payable (net)		756,000	[I_bond]	756,000			-
Other long-term liabilities	1,400,000	450,000					1,850,000
Common stock	600,000	150,000	[E]	150,000			600,000
APIC	2,000,000	500,000	[E]	500,000			2,000,000
Retained Earnings	1,140,000	344,000					1,301,500
Non-controlling interest					[C]	17,000	248,500
					[E]	231,500
Total liabilities and equity	$6,840,000	2,850,000		$1,907,500		$1,907,500	$8,350,000

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 67P

To determine

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

31, 2019.

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 ($)	Credit ($)
	[ADJ] Investment in Subsidiary		$118,500
	Beg. Retained Earnings (P)			$118,500

	[C] Equity Income from Subsidiary		$30,000
	Income attributable to NCI		$27,000
	Dividends-Subsidiary (common)			$40,000
	Non-controlling Interest			$17,000

	[E] BOY Common Stock (S)		$150,000
	APIC		$500,000
	BOY Retained Earnings (S)		$276,000
	Investment in Subsidiary @ BOY			$694,500
	Non-controlling Interest @ BOY			$231,500

	[I_bond] Bond Payable net		$756,000
	Interest Income		$50,000
	Investment in Bonds (net)			$740,000
	Interest Expense			$42,000
	BOY Investment in Subsidiary			$24,000

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, 2019 is shown below:


Income Statement	Parent	Subsidiary		Dr		Cr	Consolidated
Sales	$6,500,000	$800,000					$7,300,000
Cost of goods sold	(4,500,000)	(450,000)					(4,950,000)

Gross Profit	2,000,000	350,000					2,350,000
Operating and Other Expenses	(1,500,000)	(200,000)					(1,700,000)
Bond Interest Income	50,000		[I_bond]	50,000			0
Bond Interest Expense		(42,000)			[I_bond]	42,000	0
Total Expenses	(1,450,000)	(242,000)					(1,700,000)
Equity Income from Subsidiary	30,000		[C]	30,000
Consolidated net Income	$580,000	$108,000					650,000
Income attributable to NCI			[C]	27,000			(27,000)
Income attributable to Controlling Interest	$580,000	$108,000					$623,000

Statement of Retained Earnings
Beginning Retained Earnings	$760,000	$276,000	[E]	276,000	[ADJ]	118,500	$878,500
Income attributable to Controlling Interest	580,000	108,000					623,000
Dividends declared	(200,000)	(40,000)			[C]	40,000	(200,000)
Ending retained Earnings	$1,140,000	$344,000					$1,301,500

Balance Sheet
Assets
Cash	$700,000	$300,000					$1,000,000
Accounts receivable	800,000	500,000					1,300,000
Inventories	1,000,000	800,000					1,800,000
Investment in subsidiary	600,000		[ADJ]	118,500	[E]	694,500	0
					[I_bond]	24,000
					[I_bond]	740,000
Investment in bond (net)	740,000						0
PPE, net	3,000,000	1,250,000					4,250,000
Total Assets	$6,840,000	$2,850,000					8,350,000

Liabilities and Stockholder's Equity
Accounts payable	$800,000	$250,000					$1,050,000
Other Current liabilities	900,000	400,000					1,300,000
Bond Payable (net)		756,000	[I_bond]	756,000			-
Other long-term liabilities	1,400,000	450,000					1,850,000
Common stock	600,000	150,000	[E]	150,000			600,000
APIC	2,000,000	500,000	[E]	500,000			2,000,000
Retained Earnings	1,140,000	344,000					1,301,500
Non-controlling interest					[C]	17,000	248,500
					[E]	231,500
Total liabilities and equity	$6,840,000	2,850,000		$1,907,500		$1,907,500	$8,350,000

Answer 6

Chapter 6, Problem 67P

To determine

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

31, 2019.

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 ($)	Credit ($)
	[ADJ] Investment in Subsidiary		$118,500
	Beg. Retained Earnings (P)			$118,500

	[C] Equity Income from Subsidiary		$30,000
	Income attributable to NCI		$27,000
	Dividends-Subsidiary (common)			$40,000
	Non-controlling Interest			$17,000

	[E] BOY Common Stock (S)		$150,000
	APIC		$500,000
	BOY Retained Earnings (S)		$276,000
	Investment in Subsidiary @ BOY			$694,500
	Non-controlling Interest @ BOY			$231,500

	[I_bond] Bond Payable net		$756,000
	Interest Income		$50,000
	Investment in Bonds (net)			$740,000
	Interest Expense			$42,000
	BOY Investment in Subsidiary			$24,000

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, 2019 is shown below:


Income Statement	Parent	Subsidiary		Dr		Cr	Consolidated
Sales	$6,500,000	$800,000					$7,300,000
Cost of goods sold	(4,500,000)	(450,000)					(4,950,000)

Gross Profit	2,000,000	350,000					2,350,000
Operating and Other Expenses	(1,500,000)	(200,000)					(1,700,000)
Bond Interest Income	50,000		[I_bond]	50,000			0
Bond Interest Expense		(42,000)			[I_bond]	42,000	0
Total Expenses	(1,450,000)	(242,000)					(1,700,000)
Equity Income from Subsidiary	30,000		[C]	30,000
Consolidated net Income	$580,000	$108,000					650,000
Income attributable to NCI			[C]	27,000			(27,000)
Income attributable to Controlling Interest	$580,000	$108,000					$623,000

Statement of Retained Earnings
Beginning Retained Earnings	$760,000	$276,000	[E]	276,000	[ADJ]	118,500	$878,500
Income attributable to Controlling Interest	580,000	108,000					623,000
Dividends declared	(200,000)	(40,000)			[C]	40,000	(200,000)
Ending retained Earnings	$1,140,000	$344,000					$1,301,500

Balance Sheet
Assets
Cash	$700,000	$300,000					$1,000,000
Accounts receivable	800,000	500,000					1,300,000
Inventories	1,000,000	800,000					1,800,000
Investment in subsidiary	600,000		[ADJ]	118,500	[E]	694,500	0
					[I_bond]	24,000
					[I_bond]	740,000
Investment in bond (net)	740,000						0
PPE, net	3,000,000	1,250,000					4,250,000
Total Assets	$6,840,000	$2,850,000					8,350,000

Liabilities and Stockholder's Equity
Accounts payable	$800,000	$250,000					$1,050,000
Other Current liabilities	900,000	400,000					1,300,000
Bond Payable (net)		756,000	[I_bond]	756,000			-
Other long-term liabilities	1,400,000	450,000					1,850,000
Common stock	600,000	150,000	[E]	150,000			600,000
APIC	2,000,000	500,000	[E]	500,000			2,000,000
Retained Earnings	1,140,000	344,000					1,301,500
Non-controlling interest					[C]	17,000	248,500
					[E]	231,500
Total liabilities and equity	$6,840,000	2,850,000		$1,907,500		$1,907,500	$8,350,000

Answer 7

Chapter 6, Problem 67P

To determine

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

31, 2019.

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 ($)	Credit ($)
	[ADJ] Investment in Subsidiary		$118,500
	Beg. Retained Earnings (P)			$118,500

	[C] Equity Income from Subsidiary		$30,000
	Income attributable to NCI		$27,000
	Dividends-Subsidiary (common)			$40,000
	Non-controlling Interest			$17,000

	[E] BOY Common Stock (S)		$150,000
	APIC		$500,000
	BOY Retained Earnings (S)		$276,000
	Investment in Subsidiary @ BOY			$694,500
	Non-controlling Interest @ BOY			$231,500

	[I_bond] Bond Payable net		$756,000
	Interest Income		$50,000
	Investment in Bonds (net)			$740,000
	Interest Expense			$42,000
	BOY Investment in Subsidiary			$24,000

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, 2019 is shown below:


Income Statement	Parent	Subsidiary		Dr		Cr	Consolidated
Sales	$6,500,000	$800,000					$7,300,000
Cost of goods sold	(4,500,000)	(450,000)					(4,950,000)

Gross Profit	2,000,000	350,000					2,350,000
Operating and Other Expenses	(1,500,000)	(200,000)					(1,700,000)
Bond Interest Income	50,000		[I_bond]	50,000			0
Bond Interest Expense		(42,000)			[I_bond]	42,000	0
Total Expenses	(1,450,000)	(242,000)					(1,700,000)
Equity Income from Subsidiary	30,000		[C]	30,000
Consolidated net Income	$580,000	$108,000					650,000
Income attributable to NCI			[C]	27,000			(27,000)
Income attributable to Controlling Interest	$580,000	$108,000					$623,000

Statement of Retained Earnings
Beginning Retained Earnings	$760,000	$276,000	[E]	276,000	[ADJ]	118,500	$878,500
Income attributable to Controlling Interest	580,000	108,000					623,000
Dividends declared	(200,000)	(40,000)			[C]	40,000	(200,000)
Ending retained Earnings	$1,140,000	$344,000					$1,301,500

Balance Sheet
Assets
Cash	$700,000	$300,000					$1,000,000
Accounts receivable	800,000	500,000					1,300,000
Inventories	1,000,000	800,000					1,800,000
Investment in subsidiary	600,000		[ADJ]	118,500	[E]	694,500	0
					[I_bond]	24,000
					[I_bond]	740,000
Investment in bond (net)	740,000						0
PPE, net	3,000,000	1,250,000					4,250,000
Total Assets	$6,840,000	$2,850,000					8,350,000

Liabilities and Stockholder's Equity
Accounts payable	$800,000	$250,000					$1,050,000
Other Current liabilities	900,000	400,000					1,300,000
Bond Payable (net)		756,000	[I_bond]	756,000			-
Other long-term liabilities	1,400,000	450,000					1,850,000
Common stock	600,000	150,000	[E]	150,000			600,000
APIC	2,000,000	500,000	[E]	500,000			2,000,000
Retained Earnings	1,140,000	344,000					1,301,500
Non-controlling interest					[C]	17,000	248,500
					[E]	231,500
Total liabilities and equity	$6,840,000	2,850,000		$1,907,500		$1,907,500	$8,350,000