[Anonymous]

Could someone explain to me what happens to Total Stockholders Equity for the consolidated financial statements? I was under the impression that when consolidating at the date of acquisition we eliminate the Stockholders equity of the company we bought with the Journal Entry:

C/S……….x

APIC……..x

RE………..x

Goodwill….x

…………Investment……..x

…………Noncontrolling….x

Wouldn’t debiting these accounts decrease the total Stockholders equity? I’m doing MCQ and when asking Total Stockholders Equity, the answers are combining the two companies Stockholders Equity together. I thought the acquiree accounts were eliminated at the acquisition date?

[Determined CPA]

I posted about this a few days ago bc this confuses me as well!!!

A - 75
B - 78 God is good.
F - 77 Answered prayers.
R - 84! Done!!

Paperwork sent - waiting for license!!
Still on a cloud and in shock. Through God, all things will happen.

[mccaberp]

When you debit CS, APIC and R/E, yes, you are eliminating the subsidiary stockholder equity. This is the consolidating entry. Notice too that you're crediting investment in subsidiary which is also an elimination entry.

Your entry is also leaving out the recognition of intangibles and balance sheet adjustments FYI.

AUD: Pass
REG: Pass
BEC: Pass
FAR: Pass

First try CPA. Thank god. God bless America.

[Anonymous]

Yes, that entry is correct for eliminating the SHE of the acquiree at the acquisition date.

I also thought the total stockholder's equity in business consolidations is the acquirer's total stockholder's equity.

I remember doing MCQ in Wiley on this and they tripped me up sometimes. But I think when a question asks for total SHE in consolidations, they are just referring to the SHE of the acquirer, not the acquiree.

No clue why they are adding acquirer and acquiree SHE together.

[juuustin]

SHE of a consolidation is parent SHE deducted by SHE allotted to the NCI.

RE of a consolidation is always the entire RE of the parent.

After doing a decent amount of MCQ, I believe those statements are factual.

MD Candidate: 10/1/14

FAR - 87 (11/23/14)
REG - 87 (1/30/15)
BEC - 89 (4/19/15)
AUD - 98 (5/30/15)

Ethics - 100

Experience - In Progress!

[Gabe]

@juuustin is correct. If you own 80% of a company consolidated SHE is ALL of paren'ts SHE and 20% of sub's SHE

CPA, CFE
CISA- Experience will be completed by August 2016

[Author]

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