Solutions for Advanced Financial
Accounting Consolidation Entries 1st
edition by Nathalie Johnstone
Consolidating Entry *C - ANSUsed for non-equity method to adjust investment balance to EM
balance:
Debit Investment in Sub
Credit Beginning Retained Earnings
Consolidating Entry *G - ANSReverse prior-year intra-entity transfer:
Debit Beginning Retained Earnings of Seller
Credit Cost of Goods Sold (COGS)
Consolidating Entry *GL - ANSEliminate effect of intra-entity land transfer from a previous year:
Debit Beginning Retained Earnings of Seller
Credit Land
Consolidating Entry *GL (year of sale to outside party) - ANSDebit Retained Earnings
Credit Gain on Sale
Consolidating Entry *TA (year following transfer) - ANSReturn Equipment to original historic cost
and correct the beginning balances of RE and AD:
Debit Equipment and Beginning Retained Earnings
Credit Accumulated Depreciation
Consolidating Entry *B (year following transfer) - ANSRemove intra-entity bonds and related
interest accounts, as well as effect of discount/premium on retained earnings:
Debit Bonds Payable at Face Value, Interest Income, and Retained Earnings OR Premium on
Bond Payable
Credit Investment in Bonds, Interest Expense, and Retained Earnings OR Discount on Bond
Payable
Consolidating Entry S - ANSRemove subsidiary equity:
Debit Stock of Sub and Remaining Beginning Retained Earnings of Sub
Credit Investment in Sub and Non-Controlling Interest (NCI) in proportion to ownership %.
Consolidating Entry A - ANSAllocate excess of fair value:
Debit sub's undervalued assets and Goodwill by unamortized amount
Credit Investment in Sub and Non-Controlling Interest (NCI) in proportion to ownership %.
Accounting Consolidation Entries 1st
edition by Nathalie Johnstone
Consolidating Entry *C - ANSUsed for non-equity method to adjust investment balance to EM
balance:
Debit Investment in Sub
Credit Beginning Retained Earnings
Consolidating Entry *G - ANSReverse prior-year intra-entity transfer:
Debit Beginning Retained Earnings of Seller
Credit Cost of Goods Sold (COGS)
Consolidating Entry *GL - ANSEliminate effect of intra-entity land transfer from a previous year:
Debit Beginning Retained Earnings of Seller
Credit Land
Consolidating Entry *GL (year of sale to outside party) - ANSDebit Retained Earnings
Credit Gain on Sale
Consolidating Entry *TA (year following transfer) - ANSReturn Equipment to original historic cost
and correct the beginning balances of RE and AD:
Debit Equipment and Beginning Retained Earnings
Credit Accumulated Depreciation
Consolidating Entry *B (year following transfer) - ANSRemove intra-entity bonds and related
interest accounts, as well as effect of discount/premium on retained earnings:
Debit Bonds Payable at Face Value, Interest Income, and Retained Earnings OR Premium on
Bond Payable
Credit Investment in Bonds, Interest Expense, and Retained Earnings OR Discount on Bond
Payable
Consolidating Entry S - ANSRemove subsidiary equity:
Debit Stock of Sub and Remaining Beginning Retained Earnings of Sub
Credit Investment in Sub and Non-Controlling Interest (NCI) in proportion to ownership %.
Consolidating Entry A - ANSAllocate excess of fair value:
Debit sub's undervalued assets and Goodwill by unamortized amount
Credit Investment in Sub and Non-Controlling Interest (NCI) in proportion to ownership %.
