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

Consumers choices are prey to subtle discrepancies that

Consumers' choices are prey to subtle discrepancies that arise in cognitive accounting. Learning how and when you are prey to these discrepancies is an important step in improving your decision making. As the readings fo ...

Discussion1st discussionexamine the customer and vendor

Discussion 1st Discussion: Examine the customer and vendor functions in QuickBooks. • Use one scenario or example to explain a feature or function that will help you make better management decisions in regard to customer ...

Study guide1 what is the beta of a firm whose equity has an

STUDY GUIDE 1. What is the beta of a firm whose equity has an expected return of 21.30%, the risk-free rate is 7%, and the expected return on the stock market is 18%? 2. Two reasons for the agency problem in modern corpo ...

A tractor acquired on january 4 of the current year at a

A tractor acquired on January 4 of the current year at a cost of $100,000 has an estimated life of 10 years. Assuming that it has a residual value of $10,000, determine the depreciation expense in the current year using ...

1 identify which of the following statements is truea a

1. Identify which of the following statements is true. A. A partnership exists as long as there are at least two individuals or entities engaged in the active conduct of a trade or business or a financial operation, and ...

Assume that you recently graduated and have just reported

Assume that you recently graduated and have just reported to work as an investment advisor at the onof the firms on Wall Street. You have been presented and asked to review the following Income Statement and Balance Shee ...

Assignmentattn ashok -find the interest rate on a loan

Assignment Attn: Ashok -Find the interest rate on a loan charging $912 simple interest on a principal of $4750 after 6 years. Find the principal of a loan at 6.2% if the simple interest after 5 years 6 months is $2387. H ...

Module 1 1 page topic selectionselect any topic in

Module 1 ( 1 Page ) Topic Selection Select any topic in accounting of interest that connects to the subject matter of this course. If you have already selected the area of your doctoral research, you may choose a topic i ...

Assignment expected value and consumer choicesconsumers

Assignment: Expected Value and Consumer Choices Consumers' choices are prey to subtle discrepancies that arise in cognitive accounting. Learning how and when you are prey to these discrepancies is an important step in im ...

Decide upon an initiative you want to implement that would

Decide upon an initiative you want to implement that would increase sales over the next five years, (for example, market another product, corporate expansion, and so on). Using the sample financial statements, create pro ...

  • 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

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro