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on january 1, 2020, lake company acquired all of fut corporation's voting shares for $280,000 cash. on december 31, 2021, fut owed lake $5,000 for services provided during the year. when consolidated financial statements are prepared for 2021, which entry is needed to eliminate intercompany receivables and payables in the consolidation worksheet?

Respuesta :

In order to exclude intercompany payables and receivables from the consolidation worksheet, an Accounts Payable 5,000 entry and an Accounts Receivable 5,000 entry are required.

How are the amounts in the consolidated financial statements that are to be allocated to the noncontrolling interest determined?

The amount of earnings from the subsidiary recognized for consolidation purposes is multiplied by the ownership percentage of the noncontrolling interest.

A subsidiary company that is owned at 70% declares and distributes a cash dividend. What impact does the dividend have on the parent company's consolidated balance sheet's noncontrolling interest and retained profits balances?

A decrease in noncontrolling interest and no impact on retained earnings.

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