Buttle Co. invests in the stock of Drummond, Inc. Record the following transactions in the financial statements effects template below. 1) Purchased 7,000 shares of Drummond, Inc. common stock for $18 per; these shares represent 30% ownership of Drummond, Inc., which conveys to Buttle Co. significant influence over the 2) 3) 4) operations of Drummond Received a cash dividend of $4.62 per share from Drummond, Inc. Drummond, Inc. reports net income of $226,800. Sold all 7,000 shares of Drummond, Inc. for $170,400. Income Statement Balance Sheet Liabil- Contrib.Earned Net Cash Transaction Asset Noncash Assets Rev Expen- Capital ses ities Capital enues Income 1) 2) 3) 4) Example 4 Consider companies with the pre-acquisition balance sheets presented below. Investor Company purchases 100% of Investee Company's stock at book value by issuing new common stock. Complete the columns for Investor's post-acquisition balance sheet and the Consolidated Company post-acquisition balance sheet Pre-acquisition Post-acquisition balance sheets balance sheets Investor Investee Company Conso Investor Company Company (Equity Method) Company $49,200 lidated Current Assets Investment Other Assets Total Assets $39,600 242,400 64,800 Liabilities Common Stock Retained Earnings $291,600 $104,400 $114,000$34,800 31,200 84,000 38400 93,600 Buttle Co. invests in the stock of Drummond, Inc. Record the following transactions in the financial statements effects template below. 1) Purchased 7,000 shares of Drummond, Inc. common stock for $18 per; these shares represent 30% ownership of Drummond, Inc., which conveys to Buttle Co. significant influence over the 2) 3) 4) operations of Drummond Received a cash dividend of $4.62 per share from Drummond, Inc. Drummond, Inc. reports net income of $226,800. Sold all 7,000 shares of Drummond, Inc. for $170,400. Income Statement Balance Sheet Liabil- Contrib.Earned Net Cash Transaction Asset Noncash Assets Rev Expen- Capital ses ities Capital enues Income 1) 2) 3) 4) Example 4 Consider companies with the pre-acquisition balance sheets presented below. Investor Company purchases 100% of Investee Company's stock at book value by issuing new common stock. Complete the columns for Investor's post-acquisition balance sheet and the Consolidated Company post-acquisition balance sheet Pre-acquisition Post-acquisition balance sheets balance sheets Investor Investee Company Conso Investor Company Company (Equity Method) Company $49,200 lidated Current Assets Investment Other Assets Total Assets $39,600 242,400 64,800 Liabilities Common Stock Retained Earnings $291,600 $104,400 $114,000$34,800 31,200 84,000 38400 93,600