What is the amount of consolidated retained earnings

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Reference no: EM132040222

Use the following information to answer questions.

On January 1, 2005, Finch Corporation purchased 75% of the common stock of Grass Co. Separate balance sheet data for the companies at the combination date are given below:




Finch



Grass






Cash

$


24,000


$

206,000






Accounts Receivable



144,000



26,000






Inventory



132,000



38,000






Land



68,000



32,000






Plant assets



700,000



300,000






Accum. Depreciation

(

240,000

)

(

60,000

)





Investment in Lapp



392,000









Total assets

$


1,230,000


$

542,000


















Accounts payable

$


206,000


$

142,000






Capital stock



800,000



300,000






Retained earnings



224,000



100,000






Total liabilities & equities

$


1,230,000


$

542,000


At the date of combination, the book values of Grass's net assets were equal to the fair value except for Grass's inventory, which had a fair value of $60,000.

Determine below what the consolidated balance would be for each of the requested accounts.

1. What amount of Inventory will be reported?

a.$170,000.

b. $169,000.

c.$186,500.

d.$192,000.

2.What amount of Goodwill will be reported?

a.$10,500.

b.$20,000.

c.$42,000.

d.$75,500.

3.What amount of total liabilities will be reported?

a.$206,000.

b.$261,000.

c.$302,500.

d.$348,000.

4.What is the reported amount for the minority interest?

a.$ 69,333.

b.$100,000.

c.$130,666.

d.$150,000.

5.What is the amount of consolidated Retained Earnings?

a.$224,000.

b.$299,000.

c.$324,000.

d.$346,666.

6.What is the amount of total assets?

a.$1,244,500.

b.$1,380,000.

c.$1,472,000.

d.$1,762,000.

please explain

Reference no: EM132040222

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