Intercorporate Investments - Consolidation
I don’ think this should be that hard, but I am a little confused.
Example:
Company 1 has a 50% interest in company 2 and company 1 is deemed to have control.
When consolidating the financial statemetns what % of company 2 assets, liab., revenue, and income will company 1 show on it’s financial statements?
EOC Questions 7 - 12 for this chapter make it seem as if Company 1 will record 100% of company 2 assets/liab. on it’s own balance sheet, 100% of revenue, and only 50% of net income.
If that is correct, why does company 1 record 100% of company 2 revenue, but only 50% of income? (or maybe I am just misunderstanding)
Thanks. |