Multiple Choice
Pinata Corporation acquired an 80% interest in Smackem Inc.for $130,000 on January 1,2014,when Smackem had Capital Stock of $125,000 and Retained Earnings of $25,000.Assume the fair value and book value of Smackem's net assets were equal on January 1,2014.Pinata's separate income statement and a consolidated income statement for Pinata and Subsidiary as of December 31,2014,are shown below. 
Smackem's separate income statement must have reported net income of
A) $13,750.
B) $14,750.
C) $15,750.
D) $15,250.
Correct Answer:
Verified
Correct Answer:
Verified
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