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Prepare the consolidation worksheet for crain and downey

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Reference no: EM13868605


Crain Downy


31-Dec 31-Mar 31-Dec Last 3 Qtrs Crain's 75%
Cash 730,000 175,000 180,000
                     -   
Inventory 1,950,000 260,000 340,000
                     -   
Plant and Equipment 17,650,000 5,150,000 5,765,000
                     -   
Accumulated Depreciation -4,655,000 -935,000 -1,250,000
                     -   
Investment in Downey 3,886,875                   -                        -   
                     -   
Expenses 6,400,000 1,000,000 4,265,000 3,265,000 2,448,750
Dividends 1,275,000 150,000 250,000
                     -   
Total Debits 27,236,875 5,800,000 9,550,000 3,265,000 2,448,750
Liabilities 3,550,000 650,000 500,000
                     -   
Common Stock 350,000 100,000 100,000
                     -   
Additional Paid-In Capital 2,650,000 850,000 850,000
                     -   
Retained Earnings 9,720,000 2,800,000 2,800,000
                     -   
Sales 10,650,000 1,400,000 5,300,000 3,900,000 2,925,000
Extraordinary Gain From acquisition of Downey 105,000                   -                        -                      -                         -   
Investment Income 211,875                   -                        -                      -                         -   
Total Credits 27,236,875 5,800,000 9,550,000 3,900,000 2,925,000




-635,000 -476,250

Required:

A. Record the journal entries necessary on Crain's books for 2005 assuming that Crain uses the  equity method to account for its investment in Downey.

B. Prepare all worksheet eliminations in journal entry form necessary to consolidate Crain and  Downey at December 31, 2005.

C. Prepare the consolidation worksheet for Crain and Downey at December 31, 2005.

 

Reference no: EM13868605

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