Accounting and consolidating entry Latest adult chat room
Consolidation also refers to the merger and acquisition of smaller companies into larger companies.
Consolidation involves taking multiple accounts or businesses and combining the information into a single point.
When we compare the cost of sales we have already booked of 0,000 to the ,000 we should have, the credit to cost of sales should be 6,000.
We can then back into the amount needed as a credit to inventory of ,000 (0,000 debit to sales minus 6,000 credit to cost of sales).
At this point, you can see that the financial results of A have ,000 of intercompany profit in them.
We need to eliminate the effect of this sale because including it misstates the results to users of the financial statements (i.e. If we did not eliminate this sale, companies could sell back and forth between their subsidiaries to inflate their results, but after those transactions, the consolidated company has not made any additional profit or brought in any additional cash.
We know the original cost was 0,000 and 30% remains in Company B’s ending inventory.In financial accounting, consolidated financial statements provide a comprehensive view of the financial position of both the parent company and its subsidiaries, rather than one company's stand-alone position.In business, consolidation occurs when two or more businesses combine to form one new entity, with the expectation of increasing market share and profitability and the benefit of combining talent, industry expertise or technology.This means we should end the year with ,000 in ending inventory.But, we have ,000 in ending inventory (0,000 cost to Company B minus 0,000 relieved from inventory for sales).