Plant Company acquired all of Sprout Corporation's stock on January 1, 20X6 for $150,000 cash. On December 31, 20X8, the trial balances of the two companies were as follows: Plant CompanySprout Corporation DebitCreditDebitCreditCash$90,000 $58,000 Accounts Receivable 97,000 55,000 Land 80,000 45,000 Buildings and Equipment 300,000 200,000 Investment in Sprout Corp. 180,000 Cost of Services Provided 140,000 75,000 Depreciation Expense 30,000 20,000 Other Expenses 70,000 35,000 Dividends Declared 40,000 20,000 Accumulated Depreciation $180,000 $100,000 Accounts Payable 42,000 18,000 Taxes

Question

Payable    20,000     20,000 Notes Payable    75,000     50,000 Common Stock    100,000     50,000 Retained Earnings    265,000     90,000 Service Revenue    300,000     180,000 Income from Subsidiary    45,000        $1,027,000 $1,027,000 $508,000 $508,000 Sprout Corporation reported retained earnings of $75,000 at the date of acquisition. The difference between the acquisition price and underlying book value is assigned to buildings and equipment with a remaining economic life of five years from the date of acquisition. At December 31, 20X8, Sprout owed Plant $4,000 for services provided.Based on the preceding information, what amount of total retained earnings will be reported in the consolidated balance sheet for the year 20X8?

A. $330,000
B. $370,000
C. $450,000
D. $430,000

Answer 1

Answer: A