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 2010, Virginia made cash sales of $400,000 to Stateside. The gross profit rate was 30% of the selling price. By the end of 2010, Stateside had sold 75% of the goods to outside parties for $420,000 cash.
a. Prepare journal entries for Virginia and Stateside to record the sales/purchases during 2010.
b. Prepare the consolidation entries that should be made at the end of 2010.
c. Prepare any 2011consolidation worksheet entries that would be required regarding the 2010