REFERENCE: Ref.05_12 Virginia Corp.owned All of the Voting Common Stock of Stateside

question 68

Essay

REFERENCE: Ref.05_12
Virginia Corp.owned all of the voting common stock of Stateside Co.Both companies use the perpetual inventory method,and Virginia decided to use the partial equity method to account for this investment.During 2009,Virginia made cash sales of $400,000 to Stateside.The gross profit rate was 30% of the selling price.By the end of the year,Stateside had used 75% of the goods.
-Prepare journal entries for Virginia and Stateside to record the sales/purchases during 2009.

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Definitions:

Non-cumulative

Refers to types of shares or dividends that do not accumulate or carry over unpaid dividends into future periods.

Non-cumulative

Describes preferred stocks where dividends not declared in a given period do not accumulate and are not required to be paid in the future.

Nonparticipating

In insurance, refers to a policy that does not entitle the policyholder to share in the surplus profits of the insurer.

Participating

In finance, it often refers to securities or policies that allow owners to receive dividends, or share in profits beyond a specified amount.