Assume Dover Auto Inc. acquires all of the stock of Dover Financial Corporation. Just prior to the acquisition, their separate balance sheets are as follows:

	Dover Auto Inc	Dover Financial Corporation
Total assets	227,339,000	51,933,000
Total Liabilities	184,562,000	40,933,000
Shareholders Equity	42,777,000	11,000,000
Total Liabilities and Equity	227,339,000	51,933,000

Assume Dover Financial Corporations assets and liabilities are reported at fair value. Dover Auto Inc. pays $11,000,000 in cash to Dover Financial Corporations shareholders for Dover Financial corporations assets and liabilities and then consolidates the assets and liabilities of Dover Financial Corporation with its own assets and liabilities.

1. Please prepare the acquisition journal entry and the consolidated financial balance sheet
2. If Dover Auto Inc. instead treats the transaction as an investment, accounted for by equity method, prepare the journal entry for this transaction and prepare balance sheet of Dover Auto Inc. with this equity investment.
3. Analyze the effect that consolidation of Dover Financial Corporation has on key leverage ratios-such as debt to equity and debt to total assets. Please report Dover Auto Incs leverage ratios before investment in Dover Financial Corp, Dover Auto Inc plus equity method investment, and Dover Auto Inc. with consolidation of Dover Financial Corporation, separately.