Multiple Choice
Following are selected accounts for Green Corporation and Vega Company as of December 31, 2013. Several of Green's accounts have been omitted.
Green acquired 100% of Vega on January 1, 2009, by issuing 10,500 shares of its $10 par value common stock with a fair value of $95 per share. On January 1, 2009, Vega's land was undervalued by $40,000, its buildings were overvalued by $30,000, and equipment was undervalued by $80,000. The buildings have a 20-year life and the equipment has a 10-year life. $50,000 was attributed to an unrecorded trademark with a 16-year remaining life. There was no goodwill associated with this investment.
Compute the equity in Vega's income to be included in Green's consolidated income statement for 2013.
A) $500,000.
B) $300,000.
C) $190,375.
D) $200,000.
E) $290,375.
Correct Answer:

Verified
Correct Answer:
Verified
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