What amount should the retained earnings be

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Question - On January 1, 2021, Aguilar Company acquired an 80% investment in Alcaras Company. The acquisition cost was equal to Aguilar's equity in Alcaras net assets at that date. On January 1, 2021, Aguilar Company and Alcaras Company had retained earnings of 500 000 and 100 000, respectively. During 2021, Aguilar had net income of 200 000, which included its equity in Alcaras earnings, and declared dividends of 20 000. There were no other intercompany transactions between the parent and the subsidiary. On December 31, 2021, what amount should the retained earnings be?

a. 666 000

b. 766 000

c. 770 000

d. 650 000

Reference no: EM132974253

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