How do you put together a consolidated financial statement for a investor who has a controlling interest in a company(holdings is greater than 50%)? For the values listed under the subsidiary(affiliated) company, do you record the percentage of the revenue and expenses that the parent owns or is responsible for based upon their purchase interest in the corporation?
For example, the parent has a 60% interest in the subsidiary company called Company A. Company A's Revenue and Expenses are 100,000 and 30,000 respectively. The parent corporations Revenue is $200,000 and expenses are $50,000.
Is this how you create the consolidated statement: (A)
Parent Subsidiary
________ ------------------
Revenue 200,000 100,000
Expenses 50,000 30,000
Net Income 150,000 60,000
(revenue includes Revenue from Investment in Subsidiary Company)
OR Is this correct way of writing this?(B)
Parent Subsidiary
________ ------------------ Total
Revenue 158,000 60,000 260,000
Expenses 50,000 18,000 68,000
Net Income 150,000 42,000 192,000
(I did not include the net income from the subsidiary in revenue section)
Which is the correct way to do this, is it A or B?My textbook does not have an example of this.
For example, the parent has a 60% interest in the subsidiary company called Company A. Company A's Revenue and Expenses are 100,000 and 30,000 respectively. The parent corporations Revenue is $200,000 and expenses are $50,000.
Is this how you create the consolidated statement: (A)
Parent Subsidiary
________ ------------------
Revenue 200,000 100,000
Expenses 50,000 30,000
Net Income 150,000 60,000
(revenue includes Revenue from Investment in Subsidiary Company)
OR Is this correct way of writing this?(B)
Parent Subsidiary
________ ------------------ Total
Revenue 158,000 60,000 260,000
Expenses 50,000 18,000 68,000
Net Income 150,000 42,000 192,000
(I did not include the net income from the subsidiary in revenue section)
Which is the correct way to do this, is it A or B?My textbook does not have an example of this.