parent company and subsidiary company
DESCRIPTION
Parent Company and Subsidiary Company For Chapter 4TRANSCRIPT
Parent Company and Subsidiary CompanyConsolidation Entries
Account Title Debit CreditIncome from Subsidiary Company 35,000
Investment in Subsidiary 35,000
Income from Subsidiary Company 5,000Investment in Subsidiary 5,000
Common Stock 200,000Retained Earnings 50,000
Income from Subsidiary Company 40,000Investment in Subsidiary 210,000*Basic Elimination Entry
Depreciable Assets 20,000Inventory 20,000
Investment in Subsidiary 40,000*Excess Value (Differential) Reclassification Entry
Long-Term Notes Payable 100,000Long-Term Notes Receivable 100,000*Eliminate Intercompany Loan
Sales Revenue 7,000Administrative Expenses 7,000*Eliminate Consulting Service Intercompany Transaction
Current Liabilities 10,000Accounts Receivable 10,000
Sales Revenue 10,000 Cost of Goods Sold 5,000 Inventory 5,000 *Eliminate Intercompany Sale of Inventory Transaction
Accumulated Depreciation 50,000 Depreciable Assets 50,000
*Journal Entry to Record Parent Company's 100% Share of Subsidiary Company's 2012 Net Loss
*Journal Entry to Eliminate Unrealized Gross Project on Inventory Purchases from Subsidiary Company
*Eliminate Accounts Payable and Accounts Receivable Balances from Intercompany Sale of Inventory
*Accumulated Depreciation Elimination Entry