| | 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. |
Icutwo105
week_6_assignment_-_3_pts.xlsx
