Chapter 8, Problem 8.17P

To determine

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

Which of the given companies S or P is parent company.

To determine

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

Percentage of owner ship parent P holds in subsidiary S.

To determine

Consolidation entry: the basic consolidation entry removes the investment in parent company stock account and subsidiary’s stockholders equity accounts. Consolidation is the process of combining the financials of subsidiary with financials of parent company. This is typically done when 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.

To determine

a. Will income to non-controlling interest increase or decrease

Consolidation entry: the basic consolidation entry removes the investment in parent company stock account and subsidiary’s stockholders equity accounts. Consolidation is the process of combining the financials of subsidiary with financials of parent company. This is typically done when 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

To determine

b. Elimination entry for consolidation worksheet

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

Requirement 4

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