There will be an elimination of the subsidiary account due to investment changes. The parent’s equity income and the subsidiary dividends have been provided.
| General Journal | ||
| Description | Debit | Credit |
| Equity Investment (41,500 * $36) | $ 1,494,000.00 | |
| Common stock (41,500 * $1) | $ 41,500.00 | |
| APIC [(41,500 * (36-1)] | $ 1,452,500.00 |
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The consolidated balance sheet as at 12/31/xx has been shown in the excel sheet 1 whereas the same worksheet within the sheet 2 is the general journal for the shares and the common stocks entry to obtain the APIC.
The patent unrecorded has been provided as $261,000 whereas goodwill is $162,000. Nonetheless, the most important factor in the entries is that the retained earnings, the net income and the subsidiary amounts are to be included in the elimination account to avoid their inclusion in the consolidation account at the end of the year as at 12/31/xx.
