ject-Axlsx The following balance sheets have been prepared as at December 31, Year 6. for Kay Corp. and Adams Ventures: Cash Accounts receivable Inventory Property and plant Investment in Adams 0 Kay Adams 78,000 $ 39,000 116,000 197,000 645,000 427,000 436.000 927,000 378,000 $ 2,653,000 $1,590,000 418,000 3 168,000 522.500 618.000 972.000 486,000 740,500 318,000 $ 2,653,000 $1,590,000 Current liabilities Bonds payable Common shares Retained earnings Additional Information Kay acquired its 40% interest in Adams for $378,000 in Year 2, when Adams's retained earnings amounted to $188,000. The acquisition differential on that date was fully depleted by the end of Year 6. In Year 5, Kay sold land to Adams and recorded a gain of $78,000 on the transaction. Adams is still using this land, The December 31, Year 6, Inventory of Kay contained a profit recorded by Adams amounting to $53,000. On December 31, Year 6, Adams owes Kay $47,000. Kay has used the cost method to account for its investment in Adams. Use income tax allocation at a rate of 40%, but ignore income tax on the acquisition differential Required: (a) Prepare three separate balance sheets for Kay as at December 31, Year 6. (0) Assuming that the investment in Adams is a control investment. (1) Assuming that the investment in Adams is a control investment. Kay Corp. Consolidated Balance Sheet at December 31, Year 6 Assets Liabilities and Equity (b) Calculate the debt-to-equity ratio for each of the balance sheets in Part (a). (Round your answers to 2 decimal places.) Debt to equity ratio (ii) (c) Prepare the financial statements required for part (a) using the worksheet approach. (Input all amounts as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Leave no cells blank - be certain to enter "o" wherever required. Omit $ sign in your response.) o control ovestment 1) Control Investment store of OLIDATED FINANCIAL STATEMENT WORKING PAPER CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31 YEAR 6 DECIBO LAMANG TAL meial position - Consolidated statement of Financial Post Cash Accounts receivable Inventory Property and plant Investment in Adams Deferred Income taxes Current liabilities Bonds payable Common shares Retained earnings Non-controlling interest Joint Operation Investment - Q + ject-Axlsx The following balance sheets have been prepared as at December 31, Year 6. for Kay Corp. and Adams Ventures: Cash Accounts receivable Inventory Property and plant Investment in Adams 0 Kay Adams 78,000 $ 39,000 116,000 197,000 645,000 427,000 436.000 927,000 378,000 $ 2,653,000 $1,590,000 418,000 3 168,000 522.500 618.000 972.000 486,000 740,500 318,000 $ 2,653,000 $1,590,000 Current liabilities Bonds payable Common shares Retained earnings Additional Information Kay acquired its 40% interest in Adams for $378,000 in Year 2, when Adams's retained earnings amounted to $188,000. The acquisition differential on that date was fully depleted by the end of Year 6. In Year 5, Kay sold land to Adams and recorded a gain of $78,000 on the transaction. Adams is still using this land, The December 31, Year 6, Inventory of Kay contained a profit recorded by Adams amounting to $53,000. On December 31, Year 6, Adams owes Kay $47,000. Kay has used the cost method to account for its investment in Adams. Use income tax allocation at a rate of 40%, but ignore income tax on the acquisition differential Required: (a) Prepare three separate balance sheets for Kay as at December 31, Year 6. (0) Assuming that the investment in Adams is a control investment. (1) Assuming that the investment in Adams is a control investment. Kay Corp. Consolidated Balance Sheet at December 31, Year 6 Assets Liabilities and Equity (b) Calculate the debt-to-equity ratio for each of the balance sheets in Part (a). (Round your answers to 2 decimal places.) Debt to equity ratio (ii) (c) Prepare the financial statements required for part (a) using the worksheet approach. (Input all amounts as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Leave no cells blank - be certain to enter "o" wherever required. Omit $ sign in your response.) o control ovestment 1) Control Investment store of OLIDATED FINANCIAL STATEMENT WORKING PAPER CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31 YEAR 6 DECIBO LAMANG TAL meial position - Consolidated statement of Financial Post Cash Accounts receivable Inventory Property and plant Investment in Adams Deferred Income taxes Current liabilities Bonds payable Common shares Retained earnings Non-controlling interest Joint Operation Investment - Q +