Consolidated Financial statement

Question 1

General rule

Answer 1

When financial statement of parents and subsidiary are consolidated, the equity of subsidiary including retained earnings are eliminated.

The noncontrolling intterst account(not retained earning) will include dividend paid to others(non controling) owners during current year.

Question 2

how to treat sake of asset to subsidiary in consolidation

Answer 2

Intercompany sale should be eliminated. Asset should show original amount of asset. Depreciation should continue as sale has never occured.