how will you prepare a consolidated balance sheet in case of partly owned subsidiary company with the help of a suitable example
Answers
Answer:
Steps for preparing consolidated balance Sheet of the holding company and its subsidiary company.
1st Step
Add all the assets of subsidiary company with the assets of holding company. But Investment of holding company in Subsidiary company will not shown in consolidated balance sheet because, investment in subsidiary company will automatically adjust with the amount of share capital of subsidiary company in holding company.
2nd step
Add all the liabilities of subsidiary company with the liabilities of holding company. But Share capital of subsidiary company in holding company will not shown in the consolidated balance sheet in the books of holding company. Because, this share capital automatically adjust with the amount of the investment of holding company in to subsidiary company .
3rd Step
Calculate of Minority Interest
First of all we should know what minority interest is. Minority interest is the shareholder but there is not holding company’s shareholder. So, when holding company shows consolidated balance sheet, it is the duty of accountant to show minority interest in the liability side of consolidated balance sheet.
Explanation:
Answer:
1 . Check all of your reference information from the company
2. Adjust for any cross sales between related companies.
3. create a work sheet
4. eliminate any duplicate assets and liabilities.
5. list the consolidated trail balance on your worksheet.
6. create the actual consolidated balance sheet