Below are the balance sheets and income statements for Vadar and Skywalker for 2020 note: the equipment
Question:
Below are the balance sheets and income statements for Vadar and Skywalker for 2020
note: the equipment has a 10 year life straight line with no salvage
note: Vadar uses LIFO and purchases equaled sales so the ending inventory is the beginning inventory
note: Vadar did not sell any land during 2020
note: the only common stock transaction Skywalker had in 2020 was the purchase of Vadar
What method is being used?
Skywalker | Vadar | |
cash | 2,000,000 | 150,000 |
accounts receviable | 1,000,000 | 80,000 |
inventory | 1,000,000 | 50,000 |
equipment | 1,000,000 | 100,000 |
accumulated depreciation | 600,000 | 60,000 |
land | 1,000,000 | 100,000 |
investment in vadar | A | |
total assets | B | 420,000 |
accounts payable | 1,000,000 | 40,000 |
jcommon stock $1 par | c | 100,000 |
apic common stock | d | 100,000 |
retained earnings | e | 100,000 |
Income statement | ||
Skywalker | Vadar | |
sales | 1,000,000 | 600,000 |
COGS | 400,000 | 200,000 |
depreciation expense | 100,000 | 10,000 |
investment income | f | 0 |
net income | g | 390,000 |
Required:
A) DETERMINE THE VALUES FOR A THROUGH G
B) MAKE THE JOURNAL ENTRIES SKYWALKER MAKES DURING 2020 (AFTER ACQUISITION) DUE TO ITS INVESTMENT IN VADAR
C) PREPARE THE NECESSARY WORKSHEET ENTRIES
D) PREPARE THE CONSOLIDATED BALANCE SHEET
E) PREPARE THE CONSOLIDATED INCOME STATEMENT
Fundamentals of Financial Accounting
ISBN: 978-1259103292
4th Canadian edition
Authors: Fred Phillips, Robert Libby, Patricia Libby, Brandy Mackintosh