if using purchase accounting - how do the consolidated income statement work?

Answer 1

If you're referring to consolidations, let's say a parent co. P purchased $100 of goods from subsidiary S. When you consolidate the income statements, in P's books, you remove the purchase of $100 and in S's books, you remove the sale of $100. This will form one of your elimination entries. The idea is to present the income statement of the group as one unit.

Answer 2

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