05102009+247478+Consolidation(1)

05102009+247478+Consolidation(1) - Crane Mechanics Journal...

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Crane Mechanics Journal Transaction Debit Credit Investment in Downey 3,750,000 Cash 3,645,000 Extraordinary Gain from Acquisition of Downey 105,000 (To record acquisition) Percentage ownership 75% Book Value 4,000,000 3,000,000 Increase in Fair values Inventory 300,000 225,000 Plant and Equipment 700,000 525,000 Value of investment 3,750,000 Investment in Downey 211,875 Investment Income 211,875 (To record share in Downey's income less adjustments) Downey Income 635,000 476,250 Inventory fair value amortization (225,000) (39,375) Investment Income 211,875 Cash 75,000 Investment in Downey 75,000 (To record dividends received)
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Ref General Journal Debit Credit Eliminating entries 1 Common stock 100,000 Additional paid-in capital 850,000 Retained earnings 3,050,000 Inventory 225,000 Plant and equipment 525,000 Investment in Downey 3,750,000 Minority interest in net assets of subsidiary 1,000,000 (To eliminated Investment account at acquisition) Retained earnings at acquisition:
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05102009+247478+Consolidation(1) - Crane Mechanics Journal...

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