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    - The parent company reported sales of $3 million, cost of goods sold of $2.1 million, and gross profit of $900,000. Its subsidiary reported sales of $375,000, cost of goods sold of $225,000, and gross profit of $150,000. - Consolidation entries were made to eliminate the equity investment account and recognize income from subsidiary, resulting in consolidated net income of $362,500. - Retained earnings for both companies were consolidated to a ending balance of $1,756,325 for the parent. - Balance sheets were consolidated by eliminating intercompany accounts and combining account balances to arrive at a total consolidated balance sheet of $4,843

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    CSU Global ACT470

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    ACT470_Module_04_Option_02

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    - The parent company reported sales of $3 million, cost of goods sold of $2.1 million, and gross profit of $900,000. Its subsidiary reported sales of $375,000, cost of goods sold of $225,000, and gross profit of $150,000. - Consolidation entries were made to eliminate the equity investment account and recognize income from subsidiary, resulting in consolidated net income of $362,500. - Retained earnings for both companies were consolidated to a ending balance of $1,756,325 for the parent. - Balance sheets were consolidated by eliminating intercompany accounts and combining account balances to arrive at a total consolidated balance sheet of $4,843

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    17 views2 pages

    ACT470 Module 04 Option 02

    Uploaded by

    ABC
    - The parent company reported sales of $3 million, cost of goods sold of $2.1 million, and gross profit of $900,000. Its subsidiary reported sales of $375,000, cost of goods sold of $225,000, and gross profit of $150,000. - Consolidation entries were made to eliminate the equity investment account and recognize income from subsidiary, resulting in consolidated net income of $362,500. - Retained earnings for both companies were consolidated to a ending balance of $1,756,325 for the parent. - Balance sheets were consolidated by eliminating intercompany accounts and combining account balances to arrive at a total consolidated balance sheet of $4,843

    Copyright:

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    of 2

    ACT470-Module 4-Option 2

    Consolidation Entries
    Parent Subsidiary Dr
    Module 4- Option 2
    Sales 3,000,000 375,000
    Cost of goods sold (2,100,000) (225,000)
    Gross profit 900,000 150,000
    Income (loss) from subsidiary 32,500 0 [C] 32,500
    Operating expenses (570,000) (97,500) [D] 20,000
    Net income 362,500 52,500

    Statement of Retained Earnings:


    BOY retained earnings 1,477,200 193,750 [E] 193,750
    Net income 362,500 52,500
    Dividends (83,375) (6,825) [C]
    EOY retained earnings 1,756,325 239,425

    Balance Sheet:
    Assets
    Cash 341,566 121,211
    Accounts receivable 384,000 87,000
    Inventory 582,000 111,750
    PPE, net 2,799,600 206,750 [I]
    Patent [A] 160,000 [D]
    Goodwill [A] 100,000
    Equity investment 505,675 0 [I] 30,000 [E]
    [C]
    [A]
    4,612,841 526,711
    Liabilities & stockholders' equity
    Accounts payable 224,700 44,760
    Other current liabilities 276,816 61,276
    Long-term liabilities 1,500,000 125,000
    Common stock 490,500 25,000 [E] 25,000
    APIC 364,500 31,250 [E] 31,250
    Retained earnings 1,756,325 239,425
    4,612,841 526,711 592,500
    dation Entries
    Cr Consolidated

    3,375,000
    (2,325,000)
    1,050,000
    0
    (687,500)
    362,500

    1,477,200
    362,500
    6,825 (83,375)
    1,756,325

    462,777
    471,000
    693,750
    30,000 2,976,350
    20,000 140,000
    100,000
    250,000 0
    25,675
    260,000
    4,843,877

    269,460
    338,092
    1,625,000
    490,500
    364,500
    1,756,325
    592,500 4,843,877

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