[LD]

Hi, sorry if this is a totally stupid question BUT I’m getting confused regarding the CAR IN BIG entry (Comm Stock, APIC, RE, Invest, Noncontrol, B/S Adj, Intangibles adj, Goodwill). Sometimes it’s the way Becker explained it, e.g. credit common stock, apic, retained earnings, other times it’s reversed and I’m debiting CAR. When do I reverse the debits/credits in the mnemonic? Just to be clear, do I DR CAR when they ask for the parent company that is acquiring the subs, and reverse it if they ask about the sub?

AUD - 83
BEC - 85
FAR - 80
REG - 75

Done!! Woohoo!

[Wannafree]

Basic : You are doing all in Holding co ( parent co )
Debit Share capital ,APIC etc whatever you want to negate or cancel from credit side of Sub.
Credit Investment in sub( in parent book again ) to cancel the investment.
Credit NCI ( will go to equity section of parents )
Credit Investment in sub prior acquisition.
Now balance the plugin figure , DR ( asset ) will goodwill ,Credit ( gain or bargain ).

Keep in mind this all journal entries are for reporting purposes only in parents book , share capital will still be there in sub's book .Journal entries in Parent book will not withdraw the share capital from market or would be converted into treasury stock etc.Life will be as usual in Sub's book after acquisition.

WannaB

[Author]

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