Regarding the note, business combinations, long term equity investments, consolidated statements.

1) The merger is a business combination that is not under common control.

Because there was no related party relationship between Company A and Company B before the merger, there was no party or parties in the merger who exercised ultimate control over all parties to the merger before the merger.

2) Initial investment cost = 10,000 yuan).

The entries are as follows. Borrow: Long-term Equity Investment - Cost 8400 Loan: Equity 2000

Capital reserve - equity premium 6400

3) Company A's long-term equity investment in Company B is accounted for by the cost method, and the book value as of December 31, 2007 was RMB 84 million.

4) Adjust entries.

Borrow: Long-term equity investments - profit and loss adjustment 720

Credit: Investment income 720

5) Offsetting entries.

1 Inventory offset entries.

Borrow: Operating income 800

Credit: Cost of Doing Business 752

Inventories 48 [200x(100-80)%x(2 Bond offset entries.

Debit: Payable ** 600

Credit: Hold to maturity with an investment of 600

3 Internal claims and debts offset entries.

Debit: Accounts Payable [720x(1+17%)] Credit: Accounts Receivable.

Debit: Accounts receivable 36

Credit: Asset impairment loss 36

Debit: Accounts receivable 180

Credit: Advance Accounts 180

4 Fixed asset offset entries.

Borrow: Operating income 720

Credit: Cost of Doing Business 600

Fixed assets 120

Credit: Fixed Assets - Accumulated Depreciation 6 [(720-600) 10x6 12] Credit: Administrative Expenses 6

5 Intangible asset offset entries.

Borrow: Operating income 60

Credit: Administrative Fee 60

6 Long-term equity investment and owner's equity offset entries.

Borrow: share capital 4000

Capital reserve 2000

Surplus reserve 1090

Undistributed profit 2810

Goodwill 1200

Credit: Long-term equity investment - cost 8400

Profit and loss adjustment 720

Minority Interests 1980

7 Offsetting of investment income and profit distribution.

Borrow: Investment income 720

Minority shareholders gain or loss 180

Undistributed profit (beginning of the year) 2000

Credit: Withdrawal of surplus reserve 90

Undistributed profit 2810

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4) Adjusted profit = 900-240 + 192-120 + 6 = 738 (see (5) for adjustment method).

Investment income = 738 * 80% =

Borrow: Long-term equity investment.

Credit: Investment income.

1. Inventory: Borrow: Operating Income.

Credit: Cost of Business 560

Borrow: operating income.

Credit: Cost of business 240*80%=192

Inventories 482, Bonds:

Borrow: Bond payable 600

Credit: Hold to maturity with an investment of 600

Borrow: Investment income 23

Credit: Finance Charges 23

3. Fixed assets:

Borrow: Non-operating income 120

Credit: Fixed assets 114

Management cost 120*1 10*1 2=6

4. Accounts receivable:

Debit: Accounts payable 720

Credit: Accounts receivable 720

Debit: Accounts Receivable – Provision for Bad Debts 36

Credit: Asset impairment loss 36

5. Land: Borrow: Other Business Income 60

Credit: Administrative Fee 60

6. Prepaid Accounts:

Debit: Accounts receivable 180

Credit: Advance Accounts 180

7. Offset long-term equity investment

Borrow: Goodwill 8400-9000*80%=1200 paid-in capital 4000

Capital reserve - 2000 at the beginning of the year

Surplus reserve – 1000 at the beginning of the year

90 undistributed profit for the year - 2000 + 738-90 = 2648 credit at the end of the year: minority shareholders' equity (4000 + 2000 + 1000 + 90 + 2648) * 20% =

Long-term equity investment 8400+

8. Offset investment income:

Borrow: Investment income.

Minority shareholder returns 738*20%=

Undistributed profit (beginning of the year) 2000

Credit: Undistributed Profit – 2648 at the end of the year

Withdrawal of surplus reserve 90

The difference between the treatment of the consolidated financial statements of the investment in the establishment of a subsidiary and the consolidated holding is the investment ratio and the scope of consolidation of the financial statements.

Investing in a subsidiary means that the parent company owns a certain percentage of the equity in the subsidiary, but in the financial statements, the assets, liabilities, costs and benefits of the subsidiary are not consolidated into the financial statements of the parent company. In the case of consolidated holding, the parent company controls the decision-making power of the subsidiary, and the consolidated financial statements of the subsidiary and the parent company are included in the financial statements through the consolidated statements, including assets, liabilities, costs and benefits. At the same time, the parent company also needs to make a control judgment on the subsidiary in accordance with accounting standards to determine whether the holding subsidiary needs to make provision for goodwill impairment.

In general, the treatment of consolidated statements for the establishment of subsidiaries and consolidated holdings has different treatment methods and scope of consolidation.

Note: Introduction] The basic stage of CPAs in 2018 is underway, and the examination network collates and publishes the "2018 CPA "Accounting" Knowledge Points: Long-term Equity Investment Formed by Holding Merger" When learning, the initial measurement test points of long-term equity investment will be mastered, which is a very important chapter.

Equity investment in Changhuai, a subsidiary formed by the merger of holdings under the same control.

Tip 1] The merging party needs to stand in the perspective of the group and carry out accounting treatment according to the reporting entity as the group, and the ultimate controlling party is the parent company of the group.

Tip 2] The merger of holdings under the same control is a recombination of assets, liabilities and other resources within the group, and resources are not outsourced, so assets and liabilities are measured at book value, and fair value cannot be used, and profit or loss is not recognized.

1.A transaction to form the same control, holding merger, to obtain long-term equity investment general principles:

1) Initial measurement (initial investment cost) = book value share of the consolidated net assets of the merged party in the consolidated financial statements of the ultimate controller + goodwill formed by the ultimate controller's acquisition of the merged party.

2) Non-cash assets paid and liabilities incurred are accounted for at book value; If the merging party takes the issuance of equity as the consideration for the merger, the total par value of the issued shares shall be used as the share capital.

3) The difference between the above two adjusts the capital reserve - capital premium, and if the balance of the capital reserve (premium) is insufficient to offset the reduction, the surplus reserve and undistributed profits will be offset in turn. (Generally, the statutory surplus reserve is withdrawn according to 10% of the net profit, and the amount of equity that needs to be further written off due to the insufficient balance of the capital reserve (capital premium) should be written off accordingly according to the ratio of 10%:90%)

4) Intermediary expenses such as auditing, legal services, appraisal and consulting and other related management expenses incurred by the merging party shall be included in the profit or loss for the current period when incurred.

5) Dividends receivable are recognized separately and are not included in the initial investment cost as accounting entries for the consolidated consideration by paying cash, transferring non-cash assets or assuming debts.

Borrow: Long-term equity investment.

Dividends receivable. Capital reserve - equity premium (squeezed, possibly also on the credit side).

Surplus reserve. Credit: Bank deposits.

Capital reserve - equity premium (squeeze).

Borrow: Administrative expenses.

Credit: Bank deposits.

2) The merger consideration is based on the issuance of equity**.

Borrow: Long-term equity investment.

Credit: Share capital (par value, number of shares issued).

Capital reserve - equity premium (squeeze).

Tip 1] Audit, appraisal, lawyer and other expenses such as issuance ** are included in the capital reserve-capital premium.

Borrow: Capital Reserve - Capital Premium.

Credit: Bank deposits.

Tip 2] Audit, evaluation, attorney and other expenses incurred in the merged subsidiary.

Borrow: Administrative expenses.

Credit: Bank deposits.

Summary. In the examination of the note, long-term investment and consolidated financial statements are often examined. If you don't have a good grasp of these knowledge points, then it may have a certain impact on your test scores.

Therefore, it is very important to learn and understand these two topics. However, whether you will pass the exam or not, whether you pass the exam will depend on your mastery of other topics, as well as your study methods and efforts. It is important that you review systematically, understand concepts, master problem-solving skills, and then practice practically.

In the note examination, long-term investment and consolidated financial statements are often examined. If you don't have a good grasp of these knowledge points, then it may have a certain impact on your test scores. Therefore, it is very important to learn and understand the two topics of selling sedan cars.

However, whether you will pass the exam or not, whether you pass the exam will depend on your mastery of other topics, as well as your study methods and efforts. It is important that you review systematically, understand concepts, master problem-solving skills, and then practice practically. As long as you put in enough effort, I believe you will be able to do well in the exam.

Note: The exam often examines long-term investment and consolidated financial statements, and it is important to learn and understand these two topics. In addition, mastery of other topics and study methods can also affect test scores. It is important to understand the concepts, master the problem-solving skills, and practice the system of the stove and the land cavity system.

The consolidated financial statements and the merger of the investment relationship holding are achieved through the acquisition or purchase of the outstanding equity of the merged enterprise and the acquisition of control of the merged enterprise.

Without foreign investment, the consolidated financial statements would not enable the two enterprises to form a relationship between the parent company and the subsidiary, and there would be no enterprise group composed of the parent company and the subsidiary, and there would be no problem of consolidated financial statements. The merger of financial statements and investment relations is achieved through the acquisition or purchase of the outstanding equity of the merged enterprise and the acquisition of control over the merged enterprise.

Consolidated financial statements are always linked to equity investment, because of the mutual equity investment or the receipt of investment, when the consolidated financial statements reach the level of controlling the investment relationship between the invested enterprise through equity investment, the equity investment enterprise and the invested enterprise form a parent company and subsidiary relationship, and form a parent and subsidiary group. In this case, in order to comprehensively and comprehensively reflect the financial position and operating results of the parent company and the subsidiary, it is necessary to prepare consolidated financial statements.

Holding of foreign investment:

For these direct foreign investments, if they can exercise control or have a significant impact on the invested enterprises, they will also be regarded as long-term equity investments in accounting. The consolidated financial statements and the merger of the investment relationship holding are achieved through the acquisition or purchase of the outstanding equity of the merged enterprise and the acquisition of control of the merged enterprise. For the equity of the purchased enterprise or the merged enterprise acquired by the purchase of the consolidated financial statements, the acquired equity is accounted for as a long-term equity investment in accounting.

The question of the preparation of consolidated financial statements arises only in the case of a holding consolidation. The consolidated financial statements and the merger of the investment relationship holding are achieved through the acquisition or purchase of the outstanding equity of the merged enterprise and the acquisition of control of the merged enterprise. The consolidated financial statements of an enterprise are also related to the preparation of consolidated financial statements through direct foreign investment, or the establishment of a joint venture with other investors, or the establishment of a wholly-owned enterprise in the form of a subsidiary to engage in business activities under the control of the enterprise.