On January 1, 2018, Pride, Inc. acquired 80% of the outstanding voting common stock of Strong Corp. for $364,000. There is no active market for Strong's stock. Of this payment, $28,000 was allocated to equipment (with a five-year life) that had been undervalued on Strong's books by $35,000. Any remaining excess was attributable to goodwill, which has not been impaired.As of December 31, 2018, before preparing the consolidated worksheet, the financial statements appeared as follows: Pride, Inc. Strong Corp.Revenues$420,000 $280,000 Cost of goods sold (196,000) (112,000)Operating expenses (28,000) (14,000)Net income$196,000) $154,000 Retained earnings, 1/1/18$420,000 $210,000 Net income (above) 196,000 154,000 Dividends paid 0 0 Retained earnings,

Question

12/31/18$616,000  $364,000 Cash and receivables$294,000  $126,000 Inventory 210,000   154,000 Investment in Strong Corp 364,000   0 Equipment (net) 616,000   420,000 Total assets$1,484,000  $700,000 Liabilities$588,000  $196,000 Common stock 280,000   140,000 Retained earnings, 12/31/18 (above) 616,000   364,000 Total liabilities and stockholders' equity$1,484,000  $700,000 ??During 2018, Pride bought inventory for $112,000 and sold it to Strong for $140,000. Only half of the inventory purchase price had been remitted to Pride by Strong at year-end. As of December 31, 2018, 60% of these goods remained in the company's possession.?What is the consolidated total for equipment (net) at December 31, 2018?

A. $1,066,800.
B. $1,064,000.
C. $1,069,600.
D. $1,058,400.
E. $   952,000.

Answer 1

Answer: B