F4 - M7 - Consolidated Financial Statements

Question 1

Consolidated Balance Sheet

Answer 1

• 100% of parents and subsidiaries assets and liabilities; not include subs equity; NCI is separate and broken out

Question 2

Consolidated Income Statement

Answer 2

• 100% of parents and subsidiaries revenues and expenses and all of the subsidiaries revenues and expenses AFTER the date of acquisition
• Separate; NI, NI from NCI and NI to parent

Question 3

Consolidated Statement of Changes in Owners Equity

Answer 3

• NCI is presented separately

Question 4

Acquisition Date Calculation

Answer 4

• Common stock – subsidiary
• APIC – subsidiary
• Retained Earnings – subsidiary (at purchase date)

Question 5

Acquisition Date Eliminating Journal Entry

Answer 5

• Dr. Common Stock – Sub
• Dr. APIC – Sub
• Dr. Retained Earnings – sub
• Cr. Investment in Sub
• Cr. NCI
• Dr. Balance Sheet adjustment to FV
• Dr. Identifiable assets to FV
• Dr. Goodwill

Question 6

Parent vs Sub

Answer 6

• Assets; Parent Yes; Sub No
• Intangibles; Parent - ; Sub FV
• Goodwill; Parent - ; Sub Plug
• Investment in Sub; Parent Eliminate; Sub –
• Liabilities; Parent Yes; Sub FV
• Equity / CAR; Parent Yes; Sub Eliminate
• NCI; Parent - ; Sub FV
• Income / Expenses; Parent Yes; Sub 100% after
• Asset Adjustments; Parent - ; Sub Depr.
• Goodwill adjustments; Parent - ; Sub Impairment
• Acquisition costs; Parent Exp.; Sub –
• Intercompany – Eliminate 100%