Chapter 8, Problem 8.17AP

a.

To determine

Consolidation entry: The basic consolidation entry removes the investment in the parent company stock account and subsidiary’s stockholders' equity accounts. Consolidation is the process of combining the financials of a subsidiary with the financials of the parent company. This is typically done when a parent holds more than 50 percent of shares of another entity.

The given companies S or P is parent company.

b.

To determine

Consolidation entry: The basic consolidation entry removes the investment in the parent company stock account and subsidiary’s stockholders' equity accounts. Consolidation is the process of combining the financials of a subsidiary with the financials of the parent company. This is typically done when a parent holds more than 50 percent of shares of another entity.

Percentage of owner ship parent P holds in subsidiary S

c.

To determine

Consolidation entry: The basic consolidation entry removes the investment in the parent company stock account and subsidiary’s stockholders' equity accounts. Consolidation is the process of combining the financials of a subsidiary with the financials of the parent company. This is typically done when a parent holds more than 50 percent of shares of another entity.

Amount to be reported without consolidating entry when net income for 20X7 is $70,000.

d

To determine

Consolidation entry: The basic consolidation entry removes the investment in the parent company stock account and subsidiary’s stockholders' equity accounts. Consolidation is the process of combining the financials of a subsidiary with the financials of the parent company. This is typically done when a parent holds more than 50 percent of shares of another entity.

Increase or decrease in income to the non-controlling interest reported in 20X7 as a result of preceding consolidating entry

e

To determine

Consolidation entry: The basic consolidation entry removes the investment in the parent company stock account and subsidiary’s stockholders' equity accounts. Consolidation is the process of combining the financials of a subsidiary with the financials of the parent company. This is typically done when a parent holds more than 50 percent of shares of another entity.

Preparation of elimination entry for consolidation worksheet on December 31 20X8.