Reference no: EM132858793

On January 1, 2018, Peanuts purchased 70% of the common stock of Spike for $320,000. At that date, the stockholders' equity of Spike comprised:

Spike Equity

Common stock 65,000
Additional paid in capital 195,000
Retained earnings 97,500

No identifiable assets or liabilities required revaluation on that date.

On December 31, 2021, Spike's stockholders' equity showed the following:

Spike Equity

Common stock 65,000
Additional paid in capital 195,000
Retained earnings 292,500

• Income for 2021 was $32,500 and 16,250 dividends were paid in the year. Any goodwill is not impaired.
• Peanuts reported net income after investment income of $292,500 in its parent company records for 2021.

Question 1: If Peanuts did not apply equity accounting, and used the cost (original value) method to account for its investment from the acquisition date, what would be consolidated net income for the controlling stockholders for the year ended December 31, 2021?