This video shows how to make a consolidated balance sheet when one company acquires 100% of another company. The consolidated balance sheet presents the assets and liabilities of the combined entity, but it is not as simple as adding the figures from the 2 separate balance sheets together (this would result in double-counting). To create the consolidated balance sheet, one must make a series of adjusting and eliminating entries that do the following:

1. Eliminate the purchaser’s investment in the target

2. Eliminate the target’s stockholders’ equity accounts

3. Step up the target’s assets to their fair value

4. Recognize any goodwill