Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Accounting Basics Expert

Q1) Crane Mechanics acquired 75 percent of Downey Enterprises on March 31, 2005, for $3,645,000. Downey's book value at that date totaled $4,000,000. Appraisal values were greater than book values for recognizable assets in following amounts: Inventory ($300,000) and Plant and Equipment ($700,000). Purchase differential for Inventory is to be amortized over five months and Plant and Equipment over ten years. For remainder of 2005 Downey reports $635,000 of income and pays $100,000 in dividends. Following balances exist for Crane at December 31, 2005, and Downey

At March 31 and December 31, 2005.

  Crain
Downey
 
12/31/2005
3/31/2005
12/31/2005
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
Dividends
1,275,000
150,000
250,000
Total Debits
27,236,875
5,800,000
9,550,000
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
Extraordinary Gain From Acquisition of Downey
105,000
   
Investment Income
211,875
   
Total Credits
27,236,875
5,800,000
9,550,000

Record journal entries essential on Crain's books for 2005 suppose that Crain uses equity method to account for its investment in Downey.

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M920727

Have any Question? 


Related Questions in Accounting Basics

Bull what are some steps taken by both the fasb and iasb to

• What are some steps taken by both the FASB and IASB to move to fair value measurement for financial instruments? In what ways have some of the approaches differed? • IFRS 9-1: What is component depreciation, and when m ...

Provide a short conclusion on the calculations of variances

Provide a short conclusion on the calculations of variances in a cash budget.

Accounting assignmentyou are a business consultant

Accounting Assignment You are a business consultant providing information and advice to future small business owners. One difficult concept for your clients to understand is the concept of economic substance. Accountants ...

Read the pcaob enforcement case against christopher e

Read the PCAOB enforcement case against Christopher E. Anderson (PCAOB Release No. 105-2008-003, available at www.pcaob.org). Among the PCAOB's findings is that the audit partner, Anderson, changed materiality during the ...

Nbspcomplete all requirements which are listed

COMPLETE ALL REQUIREMENTS WHICH ARE LISTED BELOW. REQUIREMENT #1: During its first month of operation, the View Corporation, a construction company which specializes in home remodeling,                                    ...

Assignmentthis assignment has 2 parts 1000 10 word theory

Assignment This assignment has 2 parts, 1000 + 10% word theory interpretation essay and a response to a practical application of the theory. The assignment must be typed, use Arial font, 12, to avoid plagiarism, make sur ...

Practice questionsa large company has a distribution

Practice questions: A large company has a distribution department with its own garages and vehicles. Suggest six headings under which the costs of the department might be collected.

Assignment - review of current accounting issuestaskfor

Assignment - Review of Current Accounting Issues Task For this assignment assume that you are the senior accountant working for a major firm. Question 1 - The CEO has forwarded to you an interesting article and requires ...

Question 1problem a if the ceo wants to plan expansion in

Question 1: Problem A If the CEO wants to plan expansion in two new states, which should he choose, and what is the expected total cost?   Declining Same Improving EMV State 0.25 0.4 0.35   Kentucky 22 19 15 18.35 Maryla ...

Assignment - journals ledger and trial balancethe following

Assignment - Journals, Ledger and Trial Balance The following transactions relates to Merlin Bruce, a sole trader, during his first month of business: Date Transaction details 01-Jan Started business by investing $25,000 ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate