Final answer:
The consolidation of departmental income statements leads to the creation of a consolidated income statement, showing the company's total financial performance.
Step-by-step explanation:
Once all departmental income statements are put together, added, and summarized, the company now has a consolidated income statement. This financial report provides a comprehensive total of all department earnings and expenses, resulting in the company's net income. To create a consolidated income statement, each department's income statement is compiled to reflect the company’s overall financial performance. This includes the revenues, expenses, and profits or losses from all departments, giving stakeholders a complete view of the company's profitability.