Consolidated Financial Statements Scenario A+ Quality
The first part is a scenario covering the topic of consolidated financial statements. The second part is the preparation of a consolidated financial statement. You will submit both parts separately.
Part 1: Scenario - Written
A new employee has been given responsibility for preparing the consolidated financial statements of Sample Company. After attempting to work alone for some time, the employee seeks assistance in gaining a better overall understanding of the way in which the consolidation process works. You have been asked to provide assistance in explaining the consolidation process. The employee is asking you to respond to the following questions. Please provide full explanations and use examples to support your work.
1. Why must the eliminating entries be entered in the consolidation worksheet each time consolidated statements are prepared?
2. How is the beginning-of-period noncontrolling interest balance determined?
3. How is the end-of-period noncontrolling interest balance determined? Provide an example.
4. Which of the subsidiary's account balances must always be eliminated? Why?
5. Which of the parent company's account balances must always be eliminated? Why?
Your responses should be complete, cite appropriate examples, well written, and in conformity with APA formatting requirements
Part 2: Problem Solving - Journal
Using the data in the attached spreadsheet, Template8, perform the accounting required for the acquisition of Little, Inc. by Big, Inc. Within the worksheet, you are to:
1. Select an accounting method (either cost or equity) and explain why you selected this method
2. Perform the required journal entries
3. Complete the consolidation worksheet
4. Prepare the consolidated balance sheet in good form
Complete all work on the spreadsheet attached to this assignment; it will be your only deliverable.
Make sure to label your answers and provide support where needed. Your responses should be complete, well written, and in conformity with APA formatting requirements.