Parent Company owns parts of three different subsidiaries. The balance sheets and income statements for these four
Question:
Parent Company owns parts of three different subsidiaries. The balance sheets and income statements for these four companies are listed below. Note that, in the financial statements of Parent, its ownership interest in the third subsidiary has been accounted for using the equity method.
Required:
1. Prepare a consolidated balance sheet for Parent and its subsidiaries.
2. Prepare a consolidated income statement for Parent and its subsidiaries.
3. Interpretive Question: Return on sales is net income divided by total sales. Without doing any computations, state what would happen to consolidated return on sales if Subsidiary 3 were consolidated rather than accounted for using the equity method.Explain.
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Consolidated Income Statement
When talking about the group financial statements the consolidated financial statements include Consolidated Income Statement that a parent must prepare among other sets of consolidated financial statements. Consolidated Income statement that is... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain