Elimination proceduresa 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 ofthe way in which the consolidation process works. requiredyou have been asked to provide assistance in explaining the consolidation process. a.why must the eliminating entries be entered in the consolidation workpaper each time consolidated statements areprepared? b‘how is the beginning-of—period noncontrolling interest balance determined? (how is the end-of-period noncontrolling interest balance determined? dwhich of the subsidiary's account balances must always be eliminated? awhich of the parent company’s account balances must always be eliminated?

Part A)

The eliminating entries are recorded only in the consolidation work paper and therefore do not change the balances recorded on the company's books. Each time consolidated statements are prepared the balances reported on the company's books serve as the starting point. Thus, all the necessary eliminating entries must be entered in the consolidation work paper each time consolidated statements are prepared.

Part B)

For acquisitions prior to the application of FASB 141R, the balance assigned to the non-controlling shareholders at the beginning of the period is based on the book value of the net assets of the subsidiary at that date and is recorded in the work paper in the entry to eliminate the beginning stockholders' equity balances of the subsidiary and the beginning investment account balance of the parent. For acquisitions after the effective date of FASB 141 R, the non-controlling interest at a point in time is equal to its fair value on the date of combination, adjusted to date for a proportionate share of the undistributed earnings of the subsidiary and the non-controlling interest's share of any write-off of differential. Another approach to determining the non-controlling interest at a point in time is to add the remaining differential at that time to the subsidiary’s common stockholder’s equity and multiply the result by the non-controlling interests proportionate ownership interest in the subsidiary  

Part C)  

In the consolidation work paper the ending balance assigned to non-controlling interest is derived by crediting non-controlling interest for the starting balance, as indicated in the preceding question, and then adding income assigned to the non-controlling interest in the consolidated income statement and deducting a pro-rata portion of subsidiary dividends declared during the period.

Part D)

All the stockholders' equity account balances of the subsidiary must be eliminated each time consolidated financial statements are prepared. Inter-company receivables and payables, if any, must also be eliminated.

Part E)

The "investment in subsidiary" and "income from subsidiary" accounts must be eliminated each time when the consolidated financial statements are prepared. Inter-company receivables and payables, if any, must also be eliminated.

you will have $2593.74 in 10 years if you set aside $1,000 at 10%

you will have $9321.91 in 20 years if you set aside $2000 at 8%

you will have $1469.32 in 5 years if you set aside $1000 at 8%

you will have $1296.87 in 10 years if you set aside $500 at 10%

you will have $239.66 in 15 years if you set aside $100 at 6%

you will have $4660.96 in 20 years if you set aside $1000 at 8%