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

Question

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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 68P

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 ($)	Credit ($)
	[ADJ] Beg. Retained Earnings (P)		$92,430
	Investment in Subsidiary			$92,430

	[C] Equity Income from Subsidiary		$24,960
	Income attributable to NCI		$37,380
	Dividends-Subsidiary (common)			$31,200
	Non-controlling Interest			$31,140

	[E] BOY Common Stock (S)		$120,000
	APIC		$240,000
	BOY Retained Earnings (S)		$420,000
	Investment in Subsidiary @ BOY			$624,000
	Non-controlling Interest @ BOY			$156,000

	[I_bond] Bond Payable net		$1,179,781
	Interest Income		$48,900
	BOY Investment in Subsidiary		$63,630
	Investment in Bonds (net)			$1,222,201
	Interest Expense			$70,110

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	$11,400,000	$1,080,000					$12,480,000
Cost of goods sold	(8,160,000)	(660,000)					(8,820,000)

Gross Profit	3,240,000	420,000					3,660,000
Operating and Other Expenses	(1,980,000)	(282,000)					(2,262,000)
Bond Interest Income		(48,900)	[I_bond]	48,900			0
Bond Interest Expense	(70,110)				[I_bond]	70,110	0
Total Expenses	(2,050,110)	(233,100)					(2,262,000)
Equity Income from Subsidiary	24,960		[C]	24,960
Consolidated net Income	$1,214,850	$186,900					1,398,000
Income attributable to NCI			[C]	37,380			(37,380)
Income attributable to Controlling Interest	$1,214,850	$186,900					$1,360,620

Statement of Retained Earnings
Beginning Retained Earnings-Parent	$6,038,430		[ADJ]	92,430			$5,946,000
Beginning Retained Earnings-Subsidiary		$420,000	[E]	420,000			0
Income attributable to Controlling Interest	1,214,850	186,900					1,360,920
Dividends declared	(960,000)	(31,200)			[C]	30,000	(960,000)
Ending retained Earnings	$6,293,280	$575,700					$6,346,620

Balance Sheet
Assets
Cash	$1,060,261	$331,149					$1,391,410
Accounts receivable	1,800,000	480,000					2,280,000
Inventories	3,000,000	720,000					3,720,000
Investment in subsidiary	652,800		[I_bond]	63,630	[ADJ]	92,430	0
					[E]	624,000
					[I_bond]	1,222,201
Investment in bond (net)		1,222,201					0
PPE, net	10,800,000	1,236,000					12,036,000
Total Assets	$17,313,061	$3,989,350					19,427,410

Liabilities and Stockholder's Equity
Accounts payable	$1,020,000	$540,000					$1,560,000
Other Current liabilities	1,200,000	600,000					1,800,000
Bond Payable (net)	1,179,781		[I_bond]	1,179,781			-
Other long-term liabilities	1,680,000	1,913,650					3,593,650
Common stock	1,020,000	120,000	[E]	120,000			1,020,000
APIC	4,920,000	240,000	[E]	240,000			4,920,000
Retained Earnings	6,293,280	575,700					6,346,620
Non-controlling interest					[C]	31,140	187,140
					[E]	156,000
Total liabilities and equity	$17,313,061	$3,989,350		$2,227,081		$2,227,081	$19,427,410

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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 68P

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 ($)	Credit ($)
	[ADJ] Beg. Retained Earnings (P)		$92,430
	Investment in Subsidiary			$92,430

	[C] Equity Income from Subsidiary		$24,960
	Income attributable to NCI		$37,380
	Dividends-Subsidiary (common)			$31,200
	Non-controlling Interest			$31,140

	[E] BOY Common Stock (S)		$120,000
	APIC		$240,000
	BOY Retained Earnings (S)		$420,000
	Investment in Subsidiary @ BOY			$624,000
	Non-controlling Interest @ BOY			$156,000

	[I_bond] Bond Payable net		$1,179,781
	Interest Income		$48,900
	BOY Investment in Subsidiary		$63,630
	Investment in Bonds (net)			$1,222,201
	Interest Expense			$70,110

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	$11,400,000	$1,080,000					$12,480,000
Cost of goods sold	(8,160,000)	(660,000)					(8,820,000)

Gross Profit	3,240,000	420,000					3,660,000
Operating and Other Expenses	(1,980,000)	(282,000)					(2,262,000)
Bond Interest Income		(48,900)	[I_bond]	48,900			0
Bond Interest Expense	(70,110)				[I_bond]	70,110	0
Total Expenses	(2,050,110)	(233,100)					(2,262,000)
Equity Income from Subsidiary	24,960		[C]	24,960
Consolidated net Income	$1,214,850	$186,900					1,398,000
Income attributable to NCI			[C]	37,380			(37,380)
Income attributable to Controlling Interest	$1,214,850	$186,900					$1,360,620

Statement of Retained Earnings
Beginning Retained Earnings-Parent	$6,038,430		[ADJ]	92,430			$5,946,000
Beginning Retained Earnings-Subsidiary		$420,000	[E]	420,000			0
Income attributable to Controlling Interest	1,214,850	186,900					1,360,920
Dividends declared	(960,000)	(31,200)			[C]	30,000	(960,000)
Ending retained Earnings	$6,293,280	$575,700					$6,346,620

Balance Sheet
Assets
Cash	$1,060,261	$331,149					$1,391,410
Accounts receivable	1,800,000	480,000					2,280,000
Inventories	3,000,000	720,000					3,720,000
Investment in subsidiary	652,800		[I_bond]	63,630	[ADJ]	92,430	0
					[E]	624,000
					[I_bond]	1,222,201
Investment in bond (net)		1,222,201					0
PPE, net	10,800,000	1,236,000					12,036,000
Total Assets	$17,313,061	$3,989,350					19,427,410

Liabilities and Stockholder's Equity
Accounts payable	$1,020,000	$540,000					$1,560,000
Other Current liabilities	1,200,000	600,000					1,800,000
Bond Payable (net)	1,179,781		[I_bond]	1,179,781			-
Other long-term liabilities	1,680,000	1,913,650					3,593,650
Common stock	1,020,000	120,000	[E]	120,000			1,020,000
APIC	4,920,000	240,000	[E]	240,000			4,920,000
Retained Earnings	6,293,280	575,700					6,346,620
Non-controlling interest					[C]	31,140	187,140
					[E]	156,000
Total liabilities and equity	$17,313,061	$3,989,350		$2,227,081		$2,227,081	$19,427,410

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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 68P

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 ($)	Credit ($)
	[ADJ] Beg. Retained Earnings (P)		$92,430
	Investment in Subsidiary			$92,430

	[C] Equity Income from Subsidiary		$24,960
	Income attributable to NCI		$37,380
	Dividends-Subsidiary (common)			$31,200
	Non-controlling Interest			$31,140

	[E] BOY Common Stock (S)		$120,000
	APIC		$240,000
	BOY Retained Earnings (S)		$420,000
	Investment in Subsidiary @ BOY			$624,000
	Non-controlling Interest @ BOY			$156,000

	[I_bond] Bond Payable net		$1,179,781
	Interest Income		$48,900
	BOY Investment in Subsidiary		$63,630
	Investment in Bonds (net)			$1,222,201
	Interest Expense			$70,110

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	$11,400,000	$1,080,000					$12,480,000
Cost of goods sold	(8,160,000)	(660,000)					(8,820,000)

Gross Profit	3,240,000	420,000					3,660,000
Operating and Other Expenses	(1,980,000)	(282,000)					(2,262,000)
Bond Interest Income		(48,900)	[I_bond]	48,900			0
Bond Interest Expense	(70,110)				[I_bond]	70,110	0
Total Expenses	(2,050,110)	(233,100)					(2,262,000)
Equity Income from Subsidiary	24,960		[C]	24,960
Consolidated net Income	$1,214,850	$186,900					1,398,000
Income attributable to NCI			[C]	37,380			(37,380)
Income attributable to Controlling Interest	$1,214,850	$186,900					$1,360,620

Statement of Retained Earnings
Beginning Retained Earnings-Parent	$6,038,430		[ADJ]	92,430			$5,946,000
Beginning Retained Earnings-Subsidiary		$420,000	[E]	420,000			0
Income attributable to Controlling Interest	1,214,850	186,900					1,360,920
Dividends declared	(960,000)	(31,200)			[C]	30,000	(960,000)
Ending retained Earnings	$6,293,280	$575,700					$6,346,620

Balance Sheet
Assets
Cash	$1,060,261	$331,149					$1,391,410
Accounts receivable	1,800,000	480,000					2,280,000
Inventories	3,000,000	720,000					3,720,000
Investment in subsidiary	652,800		[I_bond]	63,630	[ADJ]	92,430	0
					[E]	624,000
					[I_bond]	1,222,201
Investment in bond (net)		1,222,201					0
PPE, net	10,800,000	1,236,000					12,036,000
Total Assets	$17,313,061	$3,989,350					19,427,410

Liabilities and Stockholder's Equity
Accounts payable	$1,020,000	$540,000					$1,560,000
Other Current liabilities	1,200,000	600,000					1,800,000
Bond Payable (net)	1,179,781		[I_bond]	1,179,781			-
Other long-term liabilities	1,680,000	1,913,650					3,593,650
Common stock	1,020,000	120,000	[E]	120,000			1,020,000
APIC	4,920,000	240,000	[E]	240,000			4,920,000
Retained Earnings	6,293,280	575,700					6,346,620
Non-controlling interest					[C]	31,140	187,140
					[E]	156,000
Total liabilities and equity	$17,313,061	$3,989,350		$2,227,081		$2,227,081	$19,427,410

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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 68P

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 ($)	Credit ($)
	[ADJ] Beg. Retained Earnings (P)		$92,430
	Investment in Subsidiary			$92,430

	[C] Equity Income from Subsidiary		$24,960
	Income attributable to NCI		$37,380
	Dividends-Subsidiary (common)			$31,200
	Non-controlling Interest			$31,140

	[E] BOY Common Stock (S)		$120,000
	APIC		$240,000
	BOY Retained Earnings (S)		$420,000
	Investment in Subsidiary @ BOY			$624,000
	Non-controlling Interest @ BOY			$156,000

	[I_bond] Bond Payable net		$1,179,781
	Interest Income		$48,900
	BOY Investment in Subsidiary		$63,630
	Investment in Bonds (net)			$1,222,201
	Interest Expense			$70,110

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	$11,400,000	$1,080,000					$12,480,000
Cost of goods sold	(8,160,000)	(660,000)					(8,820,000)

Gross Profit	3,240,000	420,000					3,660,000
Operating and Other Expenses	(1,980,000)	(282,000)					(2,262,000)
Bond Interest Income		(48,900)	[I_bond]	48,900			0
Bond Interest Expense	(70,110)				[I_bond]	70,110	0
Total Expenses	(2,050,110)	(233,100)					(2,262,000)
Equity Income from Subsidiary	24,960		[C]	24,960
Consolidated net Income	$1,214,850	$186,900					1,398,000
Income attributable to NCI			[C]	37,380			(37,380)
Income attributable to Controlling Interest	$1,214,850	$186,900					$1,360,620

Statement of Retained Earnings
Beginning Retained Earnings-Parent	$6,038,430		[ADJ]	92,430			$5,946,000
Beginning Retained Earnings-Subsidiary		$420,000	[E]	420,000			0
Income attributable to Controlling Interest	1,214,850	186,900					1,360,920
Dividends declared	(960,000)	(31,200)			[C]	30,000	(960,000)
Ending retained Earnings	$6,293,280	$575,700					$6,346,620

Balance Sheet
Assets
Cash	$1,060,261	$331,149					$1,391,410
Accounts receivable	1,800,000	480,000					2,280,000
Inventories	3,000,000	720,000					3,720,000
Investment in subsidiary	652,800		[I_bond]	63,630	[ADJ]	92,430	0
					[E]	624,000
					[I_bond]	1,222,201
Investment in bond (net)		1,222,201					0
PPE, net	10,800,000	1,236,000					12,036,000
Total Assets	$17,313,061	$3,989,350					19,427,410

Liabilities and Stockholder's Equity
Accounts payable	$1,020,000	$540,000					$1,560,000
Other Current liabilities	1,200,000	600,000					1,800,000
Bond Payable (net)	1,179,781		[I_bond]	1,179,781			-
Other long-term liabilities	1,680,000	1,913,650					3,593,650
Common stock	1,020,000	120,000	[E]	120,000			1,020,000
APIC	4,920,000	240,000	[E]	240,000			4,920,000
Retained Earnings	6,293,280	575,700					6,346,620
Non-controlling interest					[C]	31,140	187,140
					[E]	156,000
Total liabilities and equity	$17,313,061	$3,989,350		$2,227,081		$2,227,081	$19,427,410

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Answer 5

Chapter 6, Problem 68P

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 ($)	Credit ($)
	[ADJ] Beg. Retained Earnings (P)		$92,430
	Investment in Subsidiary			$92,430

	[C] Equity Income from Subsidiary		$24,960
	Income attributable to NCI		$37,380
	Dividends-Subsidiary (common)			$31,200
	Non-controlling Interest			$31,140

	[E] BOY Common Stock (S)		$120,000
	APIC		$240,000
	BOY Retained Earnings (S)		$420,000
	Investment in Subsidiary @ BOY			$624,000
	Non-controlling Interest @ BOY			$156,000

	[I_bond] Bond Payable net		$1,179,781
	Interest Income		$48,900
	BOY Investment in Subsidiary		$63,630
	Investment in Bonds (net)			$1,222,201
	Interest Expense			$70,110

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	$11,400,000	$1,080,000					$12,480,000
Cost of goods sold	(8,160,000)	(660,000)					(8,820,000)

Gross Profit	3,240,000	420,000					3,660,000
Operating and Other Expenses	(1,980,000)	(282,000)					(2,262,000)
Bond Interest Income		(48,900)	[I_bond]	48,900			0
Bond Interest Expense	(70,110)				[I_bond]	70,110	0
Total Expenses	(2,050,110)	(233,100)					(2,262,000)
Equity Income from Subsidiary	24,960		[C]	24,960
Consolidated net Income	$1,214,850	$186,900					1,398,000
Income attributable to NCI			[C]	37,380			(37,380)
Income attributable to Controlling Interest	$1,214,850	$186,900					$1,360,620

Statement of Retained Earnings
Beginning Retained Earnings-Parent	$6,038,430		[ADJ]	92,430			$5,946,000
Beginning Retained Earnings-Subsidiary		$420,000	[E]	420,000			0
Income attributable to Controlling Interest	1,214,850	186,900					1,360,920
Dividends declared	(960,000)	(31,200)			[C]	30,000	(960,000)
Ending retained Earnings	$6,293,280	$575,700					$6,346,620

Balance Sheet
Assets
Cash	$1,060,261	$331,149					$1,391,410
Accounts receivable	1,800,000	480,000					2,280,000
Inventories	3,000,000	720,000					3,720,000
Investment in subsidiary	652,800		[I_bond]	63,630	[ADJ]	92,430	0
					[E]	624,000
					[I_bond]	1,222,201
Investment in bond (net)		1,222,201					0
PPE, net	10,800,000	1,236,000					12,036,000
Total Assets	$17,313,061	$3,989,350					19,427,410

Liabilities and Stockholder's Equity
Accounts payable	$1,020,000	$540,000					$1,560,000
Other Current liabilities	1,200,000	600,000					1,800,000
Bond Payable (net)	1,179,781		[I_bond]	1,179,781			-
Other long-term liabilities	1,680,000	1,913,650					3,593,650
Common stock	1,020,000	120,000	[E]	120,000			1,020,000
APIC	4,920,000	240,000	[E]	240,000			4,920,000
Retained Earnings	6,293,280	575,700					6,346,620
Non-controlling interest					[C]	31,140	187,140
					[E]	156,000
Total liabilities and equity	$17,313,061	$3,989,350		$2,227,081		$2,227,081	$19,427,410

Answer 6

Chapter 6, Problem 68P

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 ($)	Credit ($)
	[ADJ] Beg. Retained Earnings (P)		$92,430
	Investment in Subsidiary			$92,430

	[C] Equity Income from Subsidiary		$24,960
	Income attributable to NCI		$37,380
	Dividends-Subsidiary (common)			$31,200
	Non-controlling Interest			$31,140

	[E] BOY Common Stock (S)		$120,000
	APIC		$240,000
	BOY Retained Earnings (S)		$420,000
	Investment in Subsidiary @ BOY			$624,000
	Non-controlling Interest @ BOY			$156,000

	[I_bond] Bond Payable net		$1,179,781
	Interest Income		$48,900
	BOY Investment in Subsidiary		$63,630
	Investment in Bonds (net)			$1,222,201
	Interest Expense			$70,110

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	$11,400,000	$1,080,000					$12,480,000
Cost of goods sold	(8,160,000)	(660,000)					(8,820,000)

Gross Profit	3,240,000	420,000					3,660,000
Operating and Other Expenses	(1,980,000)	(282,000)					(2,262,000)
Bond Interest Income		(48,900)	[I_bond]	48,900			0
Bond Interest Expense	(70,110)				[I_bond]	70,110	0
Total Expenses	(2,050,110)	(233,100)					(2,262,000)
Equity Income from Subsidiary	24,960		[C]	24,960
Consolidated net Income	$1,214,850	$186,900					1,398,000
Income attributable to NCI			[C]	37,380			(37,380)
Income attributable to Controlling Interest	$1,214,850	$186,900					$1,360,620

Statement of Retained Earnings
Beginning Retained Earnings-Parent	$6,038,430		[ADJ]	92,430			$5,946,000
Beginning Retained Earnings-Subsidiary		$420,000	[E]	420,000			0
Income attributable to Controlling Interest	1,214,850	186,900					1,360,920
Dividends declared	(960,000)	(31,200)			[C]	30,000	(960,000)
Ending retained Earnings	$6,293,280	$575,700					$6,346,620

Balance Sheet
Assets
Cash	$1,060,261	$331,149					$1,391,410
Accounts receivable	1,800,000	480,000					2,280,000
Inventories	3,000,000	720,000					3,720,000
Investment in subsidiary	652,800		[I_bond]	63,630	[ADJ]	92,430	0
					[E]	624,000
					[I_bond]	1,222,201
Investment in bond (net)		1,222,201					0
PPE, net	10,800,000	1,236,000					12,036,000
Total Assets	$17,313,061	$3,989,350					19,427,410

Liabilities and Stockholder's Equity
Accounts payable	$1,020,000	$540,000					$1,560,000
Other Current liabilities	1,200,000	600,000					1,800,000
Bond Payable (net)	1,179,781		[I_bond]	1,179,781			-
Other long-term liabilities	1,680,000	1,913,650					3,593,650
Common stock	1,020,000	120,000	[E]	120,000			1,020,000
APIC	4,920,000	240,000	[E]	240,000			4,920,000
Retained Earnings	6,293,280	575,700					6,346,620
Non-controlling interest					[C]	31,140	187,140
					[E]	156,000
Total liabilities and equity	$17,313,061	$3,989,350		$2,227,081		$2,227,081	$19,427,410

Answer 7

Chapter 6, Problem 68P

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 ($)	Credit ($)
	[ADJ] Beg. Retained Earnings (P)		$92,430
	Investment in Subsidiary			$92,430

	[C] Equity Income from Subsidiary		$24,960
	Income attributable to NCI		$37,380
	Dividends-Subsidiary (common)			$31,200
	Non-controlling Interest			$31,140

	[E] BOY Common Stock (S)		$120,000
	APIC		$240,000
	BOY Retained Earnings (S)		$420,000
	Investment in Subsidiary @ BOY			$624,000
	Non-controlling Interest @ BOY			$156,000

	[I_bond] Bond Payable net		$1,179,781
	Interest Income		$48,900
	BOY Investment in Subsidiary		$63,630
	Investment in Bonds (net)			$1,222,201
	Interest Expense			$70,110

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	$11,400,000	$1,080,000					$12,480,000
Cost of goods sold	(8,160,000)	(660,000)					(8,820,000)

Gross Profit	3,240,000	420,000					3,660,000
Operating and Other Expenses	(1,980,000)	(282,000)					(2,262,000)
Bond Interest Income		(48,900)	[I_bond]	48,900			0
Bond Interest Expense	(70,110)				[I_bond]	70,110	0
Total Expenses	(2,050,110)	(233,100)					(2,262,000)
Equity Income from Subsidiary	24,960		[C]	24,960
Consolidated net Income	$1,214,850	$186,900					1,398,000
Income attributable to NCI			[C]	37,380			(37,380)
Income attributable to Controlling Interest	$1,214,850	$186,900					$1,360,620

Statement of Retained Earnings
Beginning Retained Earnings-Parent	$6,038,430		[ADJ]	92,430			$5,946,000
Beginning Retained Earnings-Subsidiary		$420,000	[E]	420,000			0
Income attributable to Controlling Interest	1,214,850	186,900					1,360,920
Dividends declared	(960,000)	(31,200)			[C]	30,000	(960,000)
Ending retained Earnings	$6,293,280	$575,700					$6,346,620

Balance Sheet
Assets
Cash	$1,060,261	$331,149					$1,391,410
Accounts receivable	1,800,000	480,000					2,280,000
Inventories	3,000,000	720,000					3,720,000
Investment in subsidiary	652,800		[I_bond]	63,630	[ADJ]	92,430	0
					[E]	624,000
					[I_bond]	1,222,201
Investment in bond (net)		1,222,201					0
PPE, net	10,800,000	1,236,000					12,036,000
Total Assets	$17,313,061	$3,989,350					19,427,410

Liabilities and Stockholder's Equity
Accounts payable	$1,020,000	$540,000					$1,560,000
Other Current liabilities	1,200,000	600,000					1,800,000
Bond Payable (net)	1,179,781		[I_bond]	1,179,781			-
Other long-term liabilities	1,680,000	1,913,650					3,593,650
Common stock	1,020,000	120,000	[E]	120,000			1,020,000
APIC	4,920,000	240,000	[E]	240,000			4,920,000
Retained Earnings	6,293,280	575,700					6,346,620
Non-controlling interest					[C]	31,140	187,140
					[E]	156,000
Total liabilities and equity	$17,313,061	$3,989,350		$2,227,081		$2,227,081	$19,427,410