kv2
Feb 5, 2010, 11:15 PM
Hello!
I have a question I hope you guys can answer.
So the story is a parent company and its subsidiary have the conditions stated below... and I have to prepare the working paper elimination entries.
1
Acquired interest: 100%
Amount paid: 1,450,000
Subsidiary capital balances-
Capital stock: 1,000,000
Other contributed cap: 250,000
Retained earnings: 300,000
2
Acquired interest: 90%
Amount paid: 1,125,000
Subsidiary capital balances-
Capital stock: 1,000,000
Other contributed cap: 325,000
Retained earnings: (100,000)
So...
Going back to the basics.. the elimination entries are required because when the parent and sub. Prepare consolidated financial statements we want to get rid of all the overlapping that will occur, right? Such as intercompany transactions?
I have a question I hope you guys can answer.
So the story is a parent company and its subsidiary have the conditions stated below... and I have to prepare the working paper elimination entries.
1
Acquired interest: 100%
Amount paid: 1,450,000
Subsidiary capital balances-
Capital stock: 1,000,000
Other contributed cap: 250,000
Retained earnings: 300,000
2
Acquired interest: 90%
Amount paid: 1,125,000
Subsidiary capital balances-
Capital stock: 1,000,000
Other contributed cap: 325,000
Retained earnings: (100,000)
So...
Going back to the basics.. the elimination entries are required because when the parent and sub. Prepare consolidated financial statements we want to get rid of all the overlapping that will occur, right? Such as intercompany transactions?