Vonda Inc. (Vonda) is a 100-percentowned subsidiary of Atik Ltd. (Atik). During the year ended March 31, 2014, Vonda sold, on credit, merchandise costing \($500,000\) to Atik for \($1,000,000\). These were the only transactions that Atik and Vonda entered into during fiscal 2014 (with each other or with third parties) and there were no other costs incurred.

Required:

a. Prepare an income statement for Vonda for the year ended March 31, 2014.

b. What amount of accounts receivable would Vonda report on its March 31, 2014 balance sheet?

c. What amount of inventory and accounts payable would Atik report on its March 31, 2014 balance sheet?

d. Prepare Atik’s March 31, 2014 consolidated income statement assuming that intercompany transactions aren’t eliminated. How much would be reported for accounts receivable, inventory, and accounts payable on the March 31, 2014 consolidated balance sheet?

e. Prepare Atik’s March 31, 2014 consolidated income statement, assuming that intercompany transactions are eliminated. How much would be reported for accounts receivable, inventory, and accounts payable on the March 31, 2014 consolidated balance sheet?

f. Discuss the differences in the information you prepared in parts (d) and (e).
Which information is more useful to stakeholders? Explain.