Unformatted text preview: e parent/ subsidiary/ consolidation worksheet Subsidiary: an entity in which another entity, known as its parent, holds a controlling financial interest.
2-4 Consolidation Worksheets
Elimination Entries Parent
Income Statement Subsidiary DR CR Consolidated Revenues Expense
Expense Net Income
Statement of Retained Earnings
Retained Earnings (1/1)
Add: Net Income
Less: Dividends Retained Earnings (12/31)
Assets Total Assets Liabilities Equity
Total Liabilities and Equity
2-5 Overview of the Consolidation Process In the consolidation worksheet, the three financial statements need to articulate. Net income from the income statement carries down to the statement of retained earnings.
The ending balance in retained earnings carries down to the balance sheet. Elimination entries are entered into the “Elimination Entries” column (debit or credit) to eliminate any amounts that would result in “double counting.”
2-6 The Basic Elimination Entry: The Equity Method What needs to be eliminated? The subsidiary’s equity accounts The subsidiary’s dividends declared The parent’s income from sub account The parent’s investment account 2-7 Example Overview of the Consolidation Process Simple...
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