Analyzing a Consolidated Balance Sheet Varwood Company is a subsidiary of Tabor Corporation. The balance sheets for Varwood Company and for the consolidated entity at December 31, 2000, contained the following balances:

a. Does Tabor own 100 percent or less than 100 percent of Varwood’s common stock? How do you know?

b. What percentage of Varwood’s assets and liabilities are included in the consolidated balance sheet? Explain.

c. What is the amount of cash and accounts receivable reported by Tabor at December 31, 2000, if (1) there are no intercompany receivables and payables, and (2) Taber’s accounts receivable contain a $20,000 receivable from Varwood?

d. Must Tabor share a portion of Varwood’s net income with others? Explain. What portion of the income from Tabor’s separate operations must be shared with the other stockholders of Varwood?

e. Which of the questions a through d could be answered if only the consolidated financial statements were available?

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Consolidated Amounts for Varwood Company Tabor Corp. Cash and receivables Inventory $ 80,000 and Subsidiary $120,000 150,000 260,000 Land Buildings and equipment 70,000 200,000 150,000 450,000 Less: Accum. depreciation (70,000) (210,000) Total assets $380,000 $820,000