Below are the balance sheets and income statements for Vadar and Skywalker for 2020 note:

On January 2nd Skywalker acquired of 90% the outstanding stock of Vadar Company for 500,000 shares of common stock.

note: On January 2nd Skywalker was selling for $2/share

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

note: DON’T FORGET ABOUT DIVIDENDS!

MAKE SURE YOU LET ME KNOW WHAT METHOD: INITIAL VALUE (COST), PARTIAL EQUITY OR FULL EQUITY YOU ARE USING

	Skywalker		Vadar
cash	2,000,000		150,000
accounts receivable	1,000,000		80,000
inventory	1,000,000		50,000
equipment	1,000,000		100,000
accumulated depreciation	600,000		60000
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		180,000
	Income statement
	Skywalker		Vadar
sales	1,000,000		600000
cogs	400000		200000
depreciation exp	100000		10000
investment income	f		0
net income	g		390000

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

Answer rating: 100% (QA)

A a 500000 b 4000000 c 1000000 d 100000 e 1780000 f 39000 g 390000 B 1220 Purchase of Vadar Company for 500000 shares of common stock Skywalker Dr Inv... View the full answer