Why must the eliminating entries be entered in the consolidation worksheet each time consolidated statements are prepared
The main reason why we need to eliminate entries is to eliminate a subsidiary company to a parent company or elimination of one partnership to another and vice versa. In this case, consolidating the accounts will move assets and liabilities from one company or partnership to another, the aim is to generate a report on the amounts that will be available after the consolidation process.
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How is the beginning-of-period non- controlling interest balance determined?
The net assets of the subsidiary determine the non- controlling interest balance for the beginning- of- period on the date of elimination (Harris & Dilling, 2017).
How is the end-of-period non-controlling interest balance determined?
The year-end balance is determined by crediting the non- controlling interest with the opening balance.
Which of the subsidiary’s account balances must always be eliminated?
Each time consolidation is done, the subsidiary must eliminate the stockholder’s equity. This is because the subsidiary is terminated leaving the stockholders with no role to play in the management of the business. In this case, the subsidiary and the stockholder have nothing to offer after its removal, hence, they should eliminate the stockholder's equity.
Which of the parent company’s account balances must always be eliminated?
After the subsidiary and the parent join, the parent company should eliminate the income coming from the subsidiary. In this case, when the parent and subsidiary join to form one entity, the parent will no longer receive income from the subsidiary. Hence, the parent must eliminate all the incomes and intakes that are available.
Reference
Harris, P., & Dilling, P. (2017). Case Study: Consolidated Balance Sheet At Date Of Purchase. Journal of Business Case Studies (Online) , 13 (1), 1.
