Accounting consolidating online dating service that
of 0,000 and a dividend of ,000 to its shareholders.
Consolidated financial statements combine the financial statements of separate legal entities controlled by a parent company into one set of financial statements for the entire group of companies.Profit and loss from the investee increase the investment account by an amount proportionate to the investor’s shares in the investee. At the end of the year, Zombie Corp reports a Net Income is a key line item, not only in the income statement, but in all three core financial statements.This is known as the “equity pick-up.” Dividends paid out by the investee are deducted from this account. While it is arrived at through the income statement, the net profit is also used in both the balance sheet and the cash flow statement.The latter is then known as a subsidiary of the parent company.
In such a case, investments made by the parent company in the subsidiary are accounted for using the consolidation method.The subsidiary’s assets, liabilities, and all profit and loss items are reported in the consolidated financial statements of the parent company.