The following balance sheets have been prepared as at December 31, Year 6, for Kay Corp. and Adams Ventures:

	Kay			Adams
Cash	$	75,000		$	37,500
Accounts receivable		110,000			192,500
Inventory		637,500			422,500
Property and plant		1,430,000			922,500
Investment in Adams		375,000			0
	$	2,627,500		$	1,575,000
Current liabilities	$	415,000		$	165,000
Bonds payable		518,750			615,000
Common shares		960,000			480,000
Retained earnings		733,750			315,000
	$	2,627,500		$	1,575,000

Additional Information

• Kay acquired its 40% interest in Adams for $375,000 in Year 2, when Adamss retained earnings amounted to $185,000. 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 $75,000 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 $50,000.
• On December 31, Year 6, Adams owes Kay $44,000.
• 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 one separate balance sheets for Kay as at December 31, Year 6.

(ii) Assuming that the investment in Adams is a joint operation and is reported using proportionately adjusted financial statements.

(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
(i)	:
(ii)	:
(iii)	:

(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 "0" wherever required. Omit $ sign in your response.)

ii) Joint Operation Investment

					Entries
Statement of Financial Position	Kay	Adams (100%)	Adams (40%)		Dr.		Cr.	Consolidated
Cash	$	$	$		$		$	$
Accounts receivable
Inventory
Investment in Adams		$
Deferred income taxes
Property and plant	$	$	$				$
	$	$	$					$
Current liabilities	$		$					$
Bonds payable
Common shares
Retained earnings
	$	$	$					$
					$		$