Palm Company owns 60 percent of the stock of Sand Company.

This stock was reported on the balance sheet of Palm Company as an asset, Investment in Subsidiaries, at $60,000. The total equity of Sand Corporation is $100,000. On the consolidated balance sheet, the $60,000 asset would be eliminated, and because debits must equal credits,

[$60,000 / $100,000] of Sand Company’s consolidated equity also would be eliminated.