Asked by Emanuela Tigistu on Jun 28, 2024
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Fesler Inc. acquired all of the outstanding common stock of Pickett Company on January 1, 2020. Annual amortization of $22,000 resulted from this transaction. On the date of the acquisition, Fesler reported retained earnings of $520,000 while Pickett reported a $240,000 balance for retained earnings. Fesler reported net income of $100,000 in 2020 and $68,000 in 2021, and paid dividends of $25,000 in dividends each year. Pickett reported net income of $24,000 in 2020 and $36,000 in 2021, and paid dividends of $10,000 in dividends each year.If the parent's net income reflected use of the partial equity method, what were the consolidated retained earnings on December 31, 2021?
Outstanding Common Stock
The shares of a corporation's common stock that are issued, sold, and actively held by investors, excluding any treasury stock.
Annual Amortization
The process of spreading the cost of an intangible asset over its useful life on a yearly basis.
Retained Earnings
The portion of net income left over for the business after it has paid out dividends to its shareholders, often reinvested in the business.
- Implement and differentiate among the initial value, equity, and partial equity accounting techniques for investments.
- Compute and comprehend the amalgamation of financial statements encompassing retained earnings, common stock, and trademarks.
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HB
Learning Objectives
- Implement and differentiate among the initial value, equity, and partial equity accounting techniques for investments.
- Compute and comprehend the amalgamation of financial statements encompassing retained earnings, common stock, and trademarks.