On January 1, 2021, Harley Company Bought 15% of Buttercup

Multiple Choice

On January 1, 2021, Harley Company bought 15% of Buttercup Company. Harley paid $200,000 for these shares, an amount that exactly equaled the proportionate book value of Buttercup. On January 1, 2022, Buttercup acquired 80% ownership of Harley. The following data are available concerning Buttercup's acquisition of Harley:Consideration transferred for 80% interest, January 1, 2022: $1,000,000Harley's reported book value, January 1, 2022: 1,200,000Excess fair value over book value (assigned to trademarks) is amortized over 20 years. The initial value method is used by both companies. The following information is available regarding Harley and Buttercup: Compute Buttercup's accrual-based consolidated net income for 2022.

A) $254,500.
B) $244,000.
C) $233,500.
D) $245,500.
E) $256,000.