Exam 3: Consolidations - Subsequent to the Date of Acquisition

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 equity method, what were the consolidated retained earnings on December 31, 2021?

Scott Co. paid $2,800,000 to acquire all of the common stock of Dawn Corp. on January 1, 2020. Dawn's reported earnings for 2020 totaled $512,000, and it paid $160,000 in dividends during the year. The amortization of allocations related to the investment was $28,000. Scott's net income, not including the investment, was $3,310,000, and it paid dividends of $950,000.On the consolidated financial statements for 2020, what amount should have been shown for Equity in Subsidiary Earnings?

Jackson Company acquires 100% of the stock of Clark Corporation on January 1, 2020, for $4,100 cash. As of that date Clark has the following trial balance: Net income and dividends reported by Clark for 2020 and 2021 follow: The fair value of Clark's net assets that differ from their book values are listed below: Any excess of consideration transferred over fair value of net assets acquired is considered goodwill with an indefinite life.Compute the amount of Clark's long-term liabilities that would be reported in a December 31, 2020, consolidated balance sheet.