On January 1, 20X8, Potter Corporation acquired 90 percent of Shoemaker Company's voting stock, at underlying book value. The fair value of the noncontrolling interest was equal to 10 percent of the book value of Shoemaker at that date. Potter uses the fully adjusted equity method in accounting for its ownership of Shoemaker. On December 31, 20X9, the trial balances of the two companies are as follows: Potter Company Shoemaker Corporation Debit Credit Debit Credit Current Assets$200,000 $140,000 Depreciable Assets 350,000 250,000 Investment in Shoemaker Corp. 162,000 Depreciation Expense 27,000 10,000 Other Expenses 95,000 60,000 Dividends

Question

Declared 20,000      10,000     Accumulated Depreciation   $118,000     $80,000  Current Liabilities    100,000      80,000  Long-Term Debt    100,000      50,000  Common Stock    100,000      50,000  Retained Earnings    150,000      100,000  Sales    250,000      110,000  Income from Subsidiary    36,000          $854,000 $854,000  $470,000 $470,000  Based on the preceding information, what amount would be reported as retained earnings in the consolidated balance sheet prepared at December 31, 20X9?

A. $424,000
B. $314,000
C. $294,000
D. $150,000

Answer 1

Answer: C