Consolidated Balance Sheet

Koel Corporation acquired all the voting stock of Rain Company for $500,000 on January 1, 2005 when Rain had Capital Stock of $300,000 and Retained Earnings of $150,000. Rain’s assets and liabilities were fairly valued except for the plant assets. The entire cost-book differential is allocated to plant assets and is fully depreciated on a straight-line basis over a 10-year period.During 2005, Koel borrowed $25,000 on a short-term non-interest-bearing note from Rain, and on December 31, 2005, Koel mailed a check to Rain to settle the note. Rain deposited the check on January 5, 2006, but receipt of payment of the note was not reflected in Rain’s December 31, 2005 balance sheet.Required:Complete the consolidation working papers.
Koel Corporation and Subsidiary
Consolidated Balance Sheet Working Papers
at December 31, 2005
KoelRainEliminationsNon-CntlBalanceSheet
DebitCredit
INCOME STATEMENTSales$500,000$400,000900,000
Income fromRain135,000135,000
Cost of Sales(350,000)(200,000)-550,000
Other expenses(100,000)(60,000)-165,000
Net income185,000140,000185,000
Koel RetainedEarnings 1/1300,000300,000
Rain RetainedEarnings150,000150,000
Add:Net income$185,000$140,000185,000
Less:Dividends(70,000)70,000
RetainedEarnings 12/31$485,000$220,000485,000
BALANCE SHEET
Note Receivablefrom Koel25,00025,000
Other currentassets210,000300,00025,000535,000
Plant assets-net200,000425,00050,0005,000670,000
Investment inRain Company565,000
TOTAL ASSETS$975,000$750,0001,205,000
EQUITIESLiabilities290,000230,000520,000
Capital Stock200,000300,000300,000200,000
RetainedEarnings485,000220,000485,000
TOTAL EQUITIES$975,000$750,0001,205,000

PLEASE VERIFY ANSWER THAT IS CORRECT, AND PLESAE ALSO EXPLAIN HOW ARRIVED AT ANSWER

 
"Our Prices Start at $11.99. As Our First Client, Use Coupon Code GET15 to claim 15% Discount This Month!!"