Gamma, Inc. Consolidation Work Sheet Cleopatra Elimination Gamma, Inc. Corp. Deb
ID: 2540043 • Letter: G
Question
Gamma, Inc.
Consolidation Work Sheet
Cleopatra
Elimination
Gamma, Inc.
Corp.
Debit
Credit
Cash
$51,000
$20,000
Accounts receivable, net
85,000
57,000
Note receivable from Gamma
45,000
Inventory
60,000
78,000
Plant assets, net
288,000
90,000
Investment in Cleopatra
105,000
Other assets
28,000
9,000
Total
$617,000
$299,000
Accounts payable
$43,000
$21,000
Notes payable
149,000
37,000
Other liabilities
82,000
136,000
Common stock
114,000
77,000
Retained earnings
229,000
28,000
Total
$617,000
$299,000
Enter any number in the edit fields and then click Check Answer.
Gamma, Inc.
Consolidation Work Sheet
Cleopatra
Elimination
Gamma, Inc.
Corp.
Debit
Credit
Cash
$51,000
$20,000
Accounts receivable, net
85,000
57,000
Note receivable from Gamma
45,000
Inventory
60,000
78,000
Plant assets, net
288,000
90,000
Investment in Cleopatra
105,000
Other assets
28,000
9,000
Total
$617,000
$299,000
Accounts payable
$43,000
$21,000
Notes payable
149,000
37,000
Other liabilities
82,000
136,000
Common stock
114,000
77,000
Retained earnings
229,000
28,000
Total
$617,000
$299,000
Gamma, Inc., owns Cleopatra Corp. The two companies individual balance sheets are below. Requirements 1. Prepare a consolidated balance sheet of Gamma, Inc. It is sufficient to complete the consol 2. What is the amount of stockholders' equity for the consolidated entity? k sheet. Requirement 1. Prepare a consolidated balance sheet of Gamma, Inc. It is sufficient to complete the consolidation work sheet Let's prepare the consolidation work sheet for Gamma, Inc. Begin by recording the elimination entries and then complete the consolidation work sheet. (If a box is not used in the work sheet, leave the box empty, do not enter a zero.)Explanation / Answer
1) Consolidated balance sheet of Gamma Inc. There are two adjustment that are need in the scenario
i) Notes receivable from Gamma $45,000- here it will be eliminated from Cleopatra corp Assets i.e Notes receivable account and then the Notes payable of Gamma Inc.
ii) Investment in Cleopatra $105,000- Since Cleopatra is a 100% subsidiary of Gamma Inc, hence the investment represent the common stock and retained earning of Cleopatra which is eliminated in the below presentation.
2) Shareholder equity= Share capital + Retained earning- treasury shares
= $114,000+ $229,000
= $343,000
In consolidated balance sheet the share capital and retained earning of subsidiary entity is eliminated. hence in the above we can see shareholder equity of Gamma Inc only.
Please let me know if you need any further clarification.
Assets Gamma Inc Cleopatra corp elimination Dr elimination cr Total Cash $51,000 $20,000 $71,000 Accounts Receivable,net 85,000 57,000 $142,000 notes receivable from Gamma 45,000 45,000 Inventory 68,000 70,000 138,000 Plant assets, net 288,000 90,000 378,000 investment in Cleopatra 105,000 105,000 Other Assets 28,000 9,000 37,000 TOTAL $617,000 $299,000 150,000 766,000Related Questions
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