Fesler Inc. acquired all of the outstanding common stock of Pickett Company on January 1, 2017. Annual amortization of $22,000 resulted from this transaction. On the date of the acquisition, Fesler reported retained earnings of $520,000 while Pickett reported a $240,000 balance for retained earnings. Fesler reported net income of $100,000 in 2017 and $68,000 in 2018, and paid dividends of $25,000 in dividends each year. Pickett reported net income of $24,000 in 2017 and $36,000 in 2018, and paid dividends of $10,000 in dividends each year.If the parent's net income reflected use of the initial value method, what were the consolidated retained earnings on December 31, 2018?
What will be an ideal response?
| Initial value Method | |||
| Fesler (parent) balance - 1/1/17 | $ | 520,000 | |
| Fesler income - 2017 | 100,000 | ||
| Amortization - 2017 | (22,000 | ) | |
| Pickett income in excess of dividends paid - 2017 ($24,000 - $10,000) | 14,000 | ||
| Fesler dividends - 2018 | (25,000 | ) | |
| Fesler income - 2018 | 68,000 | ||
| Amortization - 2018 | (22,000 | ) | |
| Pickett income in excess of dividends paid - 2018 ($36,000 - $10,000) | 26,000 | ||
| Fesler dividends - 2018 | (25,000 | ) | |
| Consolidated retained earnings, December 31, 2018 | 634,000 | ||
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