The following accounts are as they appear on the separate company financial statements of a parent and its 100%-owned subsidiary at 12/31/06:
Required:
a. What consolidation entries are required at 12/31/06?
b. What is the consolidated net income amount?
c. What is the consolidated retained earnings amount?
d. What amount is reported for dividends in the consolidated statement of retained earnings for 2006?
e. If the parent used the equity method instead of the cost method, what would be the parent's retained earnings balance at 12/31/06?
f. If the parent used the equity method instead of the cost method, what consolidation entries would be made at the end of 2006?

Question

The following accounts are as they appear on the separate company financial statements of a parent and its 100%-owned subsidiary at 12/31/06:
  Required:
a. What consolidation entries are required at 12/31/06?
b. What is the consolidated net income amount?
c. What is the consolidated retained earnings amount?
d. What amount is reported for dividends in the consolidated statement of retained earnings for 2006?
e. If the parent used the equity method instead of the cost method, what would be the parent's retained earnings balance at 12/31/06?
f. If the parent used the equity method instead of the cost method, what consolidation entries would be made at the end of 2006?

Quizplus · Accepted Answer

The Answer of The following accounts are as they appear on the separate company financial statements of a parent and its 100%-owned subsidiary at 12/31/06:
  Required:
a. What consolidation entries are required at 12/31/06?
b. What is the consolidated net income amount?
c. What is the consolidated retained earnings amount?
d. What amount is reported for dividends in the consolidated statement of retained earnings for 2006?
e. If the parent used the equity method instead of the cost method, what would be the parent's retained earnings balance at 12/31/06?
f. If the parent used the equity method instead of the cost method, what consolidation entries would be made at the end of 2006?

The Following Accounts Are as They Appear on the Separate