Reference no: EM13953570
On January 1, 2000 Yoda Company purchased all the stock of Vadar Company at book value. On October 31st 2015 Yoda sold inventory to Vadar on account. The inventory had cost Yoda $50,000 and it was sold to Vadar for $90,000. At the end of 2015 none of the inventory had been sold by Vadar and Vadar hadn’t paid Yoda for the merchandise. In 2016, Vadar sold 60% of the merchandise purchased from Yoda to outsiders for $110,000, and Vadar paid Yoda the $90,000. In 2017 Vadar sold the rest of the merchandise purchased from Yoda to outsiders for $60,000. Below are the income statements of Yoda and Vadar for 2015, 2016 and 2017. Note Yoda uses initial value method and Vadar has not paid any dividends during the 3 years. 2015 Yoda Vadar Sales 4,000,000 1,000,000 Cogs 1,900,000 600,000 Gross profit 2,100,000 400,000 Oper. Expenses 1,000,000 200,000 Income 1,100,000 200,000 2016 Yoda Vadar Sales 4,200,000 1,100,000 COGS 2,100,000 700,000 Gross profit 2,100,000 400,000 Open expenses 1,000,000 180,000 Income 1,100,000 220,000 2017 Yoda Vadar Sales 4,500,000 1,200,000 Cogs 2,100,000 500,000 Gross profit 2,400,000 700,000 Oper expenses 1,000,000 400,000 Income 1,400,000 300,000
REQUIRED:
A) MAKE THE JOURNAL ENTRIES YODA MAKES WHEN IT SELLS THE MERCHANDISE TO VADAR (YODA USES PERPETUAL INVENTORY METHOD)
B) MAKE THE JOURNAL ENTRY VADAR MAKES WHEN IT BUYS THE MERCHANDISE FROM YODA (VADAR USES PERPETUAL INVENTORY METHOD)
C) MAKE ANY NECESSARY WORKSHEET ENTRIES IN 2015 D) PREPARE A 2015 CONSOLIDATED INCOME STATEMENT E) MAKE ANY NECESSARY WORKSHEET ENTRIES IN 2016
F) PREPARE A 2016 CONSOLIDATED INCOME STATEMENT G) MAKE ANY NECESSARY WORKSHEET ENTRIES IN 2017 H) PREPARE A 2017 CONSOLIDATED INCOME STATEMENT
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