Start Consolidating financial statements worksheet

Consolidating financial statements worksheet

For the remainder of 2005 Downey reports $635,000 of income and pays $100,000 in dividends.

This report can be produced at a location level (one column per location) or at a company level (one column per company). Add consolidation worksheet (category 115) records to print the appropriate balances on the worksheet.

Both versions also provide total and worksheet columns. Review the chart of accounts to determine all accounts or account ranges that should have balances listed on the report. Each record defines the account number used as the last account to be included in the report line.

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Crain Downey 12/31 3/31 12/31 Cash $730,000 $175,000 $180,000 Inventory 1,950,000 260,000 340,000 Plant and Equipment 17,650,000 5,150,000 5,765,000 Accumulated Depreciation (4,655,000) (935,000) (1,250,000) Investment in Downey 3,886,875 Expenses 6,400,000 1,000,000 4,265,000 Dividends 1,275,000 150,000 250,000 Total Debits $27,236,875 $5,800,000 $9,550,000 Liabilities $3,550,000 $650,000 $500,000 Common Stock 350,000 100,000 100,000 Additional Paid-In Capital 2,650,000 850,000 850,000 Retained Earnings 9,720,000 2,800,000 2,800,000 Sales 10,650,000 1,400,000 5,300,000 Total Credits $27,236,875 $5,800,000 $9,550,000 Extraordinary Gain From Acquisition of Downey 105,000 Investment Income 211,875 Required: a) Record the journal entries necessary on Crain's books for 2005 assuming that Crain uses the equity method to account for its investment in Downey.

b) Prepare all worksheet eliminations in journal entry form necessary to consolidate Crain and Downey at December 31, 2005.

Thus, when combined level financial statements are prepared, intercompany transactions are not included.

To simplify the creation of consolidation journals, General Ledger generates a consolidation worksheet listing balances for user-defined account ranges.

Refer to the Input Procedures section for instructions to display the screen.

The following example illustrates consolidation processing. Sales by company/location 001/001: Accounts Receivable 100 Sales 100- 001/002 receives the cash: Interco.

The consolidation worksheet facilitates this process by listing balances for user-defined account ranges so that accurate journals are entered to perform the elimination.