1.7 Consolodated financial statements Flashcards
Non-Controlling interest is presented how?
separately in STOCKHOLDERS’ EQUITY section of the balance sheet
A consolidated income statement, state of retained earnings, or statement of cash flow would be … what?
would be the same as the statements of the parent entity. This is because there will not yet have been any activity including the sub
what is the “EAGLIN” (eagle in) journal entry ? Debit Side
DR.
(E) Equity of subsidiary (common stock, APIC, Retained Earnings)
(A) Assets F.V > BV net of excess depreciation
(G) Goodwill
what is the “EAGLIN” (eagle in) journal entry ? Credit Side
(L) Liabilities FV> Book Value
(I) Investment in Subsidiary
(N) non-controlling interest
Majority voting interest is created when ?
an investor directly or indirectly owns more than 50% of the outstanding voting shares of an entity
FV is measured at date of acquisition, then adjusted in future periods for :
1.) the (non controlling) portion of the acquirees net income (+)
2. ) and (non controlling) dividends paid out (-)
Where the parent carries investment in sub, using the cost or equity method would be a concern at the end of an operating period but not (when)?
following in preparing financial statements immediately following a combination!
Parent’s Share of sub’s income or loss , journal entry
Dr. Investment in sub (balance Sheet)
Cr. Equity in earnings (income
statement)
Parents Share of dividends declared by sub , journal entry.
Dr. Dividends receivable/cash
Cr. Investment in sub (Balance Sheet)
Amortization of any difference between the FV & carrying value of identifiable assets . If FV is greater than carrying value, journal entry
Dr. Equity in Earnings (income statement)
Cr. Investment in sub ( Balance sheet )
To Consolidate Balance Sheet at Year end you must ?
- Combine 100 % of Assets + Liabilities of both companies
- Do EAGLIN journal entry
Consolidted equity = ?
=Parent Equity +NCI
- Consolidted equity also equals ?
=Consolidated assets + consolidated liabilities
