Accounting treatment from the perspective of subsidiaries: when the distribution is announced,
Borrow: profit distribution-undistributed profit,
Loan: Profit Distribution-dividend payable.
Borrow: Profit Distribution-dividend payable,
Loan: dividend payable.
When actually paying dividends to the outside world,
Borrow: dividend payable,
Loan: bank deposit.
Accounting treatment from the perspective of parent company;
When the subsidiary announced the dividend,
Debit: dividends receivable,
Loan: investment income.
When the dividend is actually received,
Debit: bank deposit,
Credit: Dividends receivable.
All the income of wholly-owned subsidiaries belongs to the parent company. The main purpose of the parent company to set up a subsidiary is to expand its business scope, which is beneficial to the parent company in theory. However, the final result depends on its operating conditions. The net profit "attributable to the parent company" refers to the net profit attributable to the owner of the parent company in the consolidated column. The parent company has the actual decision-making power on major issues of its subsidiaries, can decide the composition of the board of directors of its subsidiaries, and can directly exercise the power to appoint directors of the board of directors.
How does the subsidiary offset the dividend merger with the parent company?
1. The parent company's investment in its subsidiaries is accounted for by the equity method, so that the subsidiaries generate net profit. According to the equity method, the parent company will generate investment income (which will enter the income statement of the parent company), and the subsidiary company will of course enter the income statement (profit distribution), so it should be offset.
Borrow: Investment income (share of parent company)
Loan: profit distribution (subsidiary)
2. In order to reflect the rights and interests of the parent company, by the way, the net profit generated by the minority shareholder department of the subsidiary company is also offset:
Borrow: minority shareholders' rights and interests (minority shareholders' share)
Loan: profit distribution (subsidiary)
3. As the adjustment distribution is adjusted year by year, it can only be compiled when consolidated statements are made. The adjustments of 1 and 2 made in previous years have no influence on the consolidated income statement of parent and subsidiary companies this year, so the investment income of previous years should also be offset. According to the meaning of 1 and 2, the offset this year is the net profit of the subsidiary this year:
Borrow: undistributed profit at the beginning of the year (subsidiary)
Loan: profit distribution (subsidiaries in previous years will not enter this year's profit distribution)
To sum up:
Borrow: Investment income (share of parent company)
Minority shareholders' rights and interests (minority shareholders' share)
Undistributed profit at the beginning of the year (subsidiary)
Loan: profit distribution (subsidiary)
The profit distribution of subsidiaries is to extract surplus reserves, distribute profits to shareholders and the remaining undistributed profits at the end of the year.
Namely:
Borrow: Investment income (share of parent company)
Minority shareholders' rights and interests (minority shareholders' share)
Undistributed profit at the beginning of the year (subsidiary)
Loan: withdrawal of surplus reserve.
Distribute profits to shareholders
Undistributed profit at year end
Generally speaking, it is necessary to offset all the profits realized by subsidiaries in the current year and the beginning of the year. Parent company's investment income+minority shareholders' income share+beginning of the year = subsidiary company's profit distribution.
Consolidated Offset Entries of Subsidiary Sales to Parent Company
Answer: Borrow: The income from the main business offsets the income of the parent company.
Loan: the main business cost offsets the subsidiary cost.
Because it is sold to the subsidiary at the cost price, there is no need to write down the inventory.
If there is no payment, the accounts receivable of the parent company and the accounts payable of the subsidiary will offset each other.