Corporate Accounting: Consolidation Journal Entries, Group Income Statement, Balance Sheet, and Equity Statement

This article covers consolidation journal entries, group income statement, balance sheet, and equity statement in corporate accounting. It also includes a requirement for consolidation journal entries with non-controlling interest.

1CORPORATE ACCOUNTING
Corporate Accounting
Name of the Student:
Name of the University:
Author’s Note:

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Table of Contents
Consolidation Journal Entries:.........................................................................................................3
Group Income Statement:................................................................................................................4
Group Balance Sheet:......................................................................................................................5
Group Statement of Equity:.............................................................................................................6
Requirement 19: Consolidation Journal entries with Non-Controlling Interest..............................7
Bibliography:...................................................................................................................................8

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Consolidation Journal Entries:
Dr. Cr.
Date Particulars Amount Amount
1 Share Capital A/c. Dr. 200000
Retained Earnings (1/7/18) A/c. Dr. 180000
To, Gain on Bargain Purchase A/c. 24000
To, Investment in Parko Ltd. A/c. 356000
(Elimination of Investment in Parko Ltd.)
2 Sales Revenue A/c. Dr. 45000
To, Cost of Goods Sold A/c. 45000
(Sale of Inventory from Parko to Joel)
3 Sales Revenue A/c. Dr. 5000
To, Inventory A/c. 5000
(Eliminating unrealized profit in the Closing Inventory of Joel Ltd.)
4 Deferred Tax Assets A/c. Dr. 1500
To, Tax expense A/c. 1500
(Tax effect of eliminating unrealized profit in the Closing Inventory of Joel
Ltd.)
5 Sales Revenue A/c. Dr. 58000
To, Cost of Goods Sold A/c. 58000
(Sale of Inventory from Joel to Parko)
6 Sales Revenue A/c. Dr. 2000
To, Inventory A/c. 2000
(Eliminating unrealized profit in the Closing Inventory of Parko Ltd.)
7 Deferred Tax Assets A/c. Dr. 600
To, Tax expense A/c. 600
(Tax effect of eliminating unrealized profit in the Closing Inventory of
Parko Ltd.)
8 Retained Earnings (1/7/18) A/c. Dr. 10000
To, Cost of Goods Sold A/c. 10000

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(Eliminating unrealized profit in the Opening Inventory held by Joel Ltd.)
9 Tax Expense A/c. Dr. 3000
To, Retained Earnings (1/7/18) A/c. 3000
(Tax Effect of Eliminating unrealized profit in the Opening Inventory held
by Joel Ltd.)
10 Gain on Sale of Plant A/c. Dr. 35000
To, Plant A/c. 35000
(Eliminating Gain on Sale of Plant of Parko Ltd.)
11 Deferred Tax Assets A/c. Dr. 10500
To, Tax expense A/c. 10500
(Tax effect on eliminating Gain on Sale of Plant of Parko Ltd.)
12 Accumulated Depreciation A/c. Dr. 5833
To, Depreciation A/c. 5833
(Reversing the excess depreciation)
13 Tax Expense A/c. Dr. 1750
To, Deferred Tax Assets A/c. 1750
(Tax Effect on Reversing the excess depreciation)
14 Management Fees Revenue A/c. Dr. 26500
To,
Management Fees Expense
A/c. 26500
(Eliminating the management fees transaction within the group)
15 Dividend Received from Parko Ltd. A/c. Dr. 93000
To, Dividend Paid A/c. 93000
(Eliminating the dividend paid within the group)
Group Income Statement:
In the books of Joel Ltd.
GROUP INCOME STATEMENT
for the period ended 30 June 2019
Eliminations & Adjustments
Account Name Joel Ltd. Parko Ltd. Debit Credit Group
(in thousand) (in thousand) (in thousand) (in thousand) (in thousand)

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Sales Revenue $671.40 $540.00 $110.00 $1,101.40
Cost of Goods Sold -$464.00 -$238.00 -$113.00 -$589.00
Gross Profit $207.40 $302.00 $512.40
Dividends received from Parko Ltd. $93.00 $93.00 $0.00
Management Fee Revenue $26.50 $26.50 $0.00
Gain on Sale of Plant $40.00 $35.00 $35.00 $40.00
Gain on Bargain Purchase $24.00 $24.00
Expenses:
Administrative Expense -$30.80 -$38.70 -$69.50
Depreciation -$29.50 -$56.80 -$5.83 -$80.47
Management fee expense -$26.50 -$26.50 $0.00
Other Expenses -$101.10 -$72.00 -$173.10
Profit before tax $205.50 $143.00 $253.33
Tax Expense $61.50 $42.20 $4.75 $12.60 $95.85
Profit for the year $144.00 $100.80 $157.48
Group Balance Sheet:
In the books of Joel Ltd.
GROUP BALANCE SHEET
as on 30 June 2019
Eliminations &
Adjustments
Account Name Joel Ltd. Parko Ltd. Debit Credit Group
(in
thousand)
(in
thousand)
(in
thousand)
(in
thousand)
(in
thousand)
Current Assets:
Accounts Receivable $59.40 $62.30 $121.70
Inventory $92.00 $29.00 $7.00 $114.00
Deferred Tax Assets $12.60 $1.75 $10.85
Total Current Assets $151.40 $91.30 $246.55
Non-Current Assets:
Land & Buildings $224.00 $326.00 $550.00
Plant-at Cost $299.85 $355.80 $35.00 $620.65
Accumulated Depreciation -$85.75 -$138.80 -$5.83 -$218.72
Investment in Parko Ltd. $356.00 $356.00 $0.00
Total Non-Current Assets $794.10 $543.00 $951.93
TOTAL ASSETS $945.50 $634.30 $1,198.48
Current Liabilities:

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Accounts Payable $54.70 $46.30 $101.00
Tax Payable $41.30 $25.00 $66.30
Total Current Liabilities $96.00 $71.30 $167.30
Non-Current Liabilities:
Loans $173.50 $116.00 $289.50
Total Non-Current Liabilities $173.50 $116.00 $289.50
TOTAL LIABILITIES $269.50 $187.30 $456.80
Shareholder's Equity:
Opening Retained Earnings $319.40 $239.20 $190.00 $3.00 $371.60
Add: Net Profit for the period $144.00 $100.80 $157.48
$463.40 $340.00 $529.08
Less: Dividends Paid -$137.40 -$93.00 -$93.00 -$137.40
Retained Earnings as on 30/6/19 $326.00 $247.00 $391.68
Share Capital $350.00 $200.00 $200.00 $350.00
TOTAL EQUITY $676.00 $447.00 $741.68
TOTAL LIABILITIES & EQUITY $945.50 $634.30 $1,198.48
Group Statement of Equity:
In the books of Joel Ltd.
GROUP STATEMENT OF EQUITY
for the period ended 30 June 2019
Particulars Share Capital
Group Retained
Earnings
Group Total
Equity
(in thousand) (in thousand) (in thousand)
Opening Balance as on 1/7/18 $350.00 $371.60 $721.60
Add: Net Profit for the period $157.48 $157.48
Less: Dividend Paid -$137.40 -$137.40
Closing Balance as on 30/6/19 $350.00 $391.68 $741.68
Requirement 19: Consolidation Journal entries with Non-Controlling Interest
Dr. Cr.
Date Particulars Amount Amount

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1 Share Capital A/c. Dr. 160000
Retained Earnings (1/7/18) A/c. Dr. 144000
Goodwill A/c. Dr. 196000
To, Investment in Parko Ltd. A/c. 500000
(Elimination of Investment in Parko Ltd.)
2 Share Capital A/c. Dr. 40000
Retained Earnings (1/7/18) A/c. Dr. 36000
To, Non-Controlling Interest A/c. 76000
(Recording the Non-Controlling Interest in Parko Ltd.)

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Bibliography:
Warren, C.S. and Jones, J., 2018. Corporate financial accounting. Cengage Learning.
Williams, J., 2014. Financial accounting. McGraw-Hill Higher Education.