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Category > Accounting Posted 05 Nov 2017 My Price 5.00

Owen Corp and Sharp Corp

On January 1, 2006, Owen Corp. purchased all of Sharp Corp.’s common stock for $1,200,000. On that date, the fair values of Sharp’s assets and liabilities equaled their carrying amounts of $1,320,000 and $320,000, respectively. During 2006, Sharp paid cash dividends of $20,000.

Selected information from the separate balance sheets and income statements of Owen and Sharp as of December 31, 2006, and for the year then ended follows:

   

Owen

Sharp

Balance sheet accounts

    
 

Investment in subsidiary

$1,320,000

--
 

Retained earnings

1,240,000

560,000
 

Total stockholders’ equity

2,620,000

1,120,000

Income statement accounts

    
 

Operating income

420,000

200,000
 

Equity in earnings of Sharp

140,000

--
 

Net income

400,000

140,000

In Owen’s December 31, 2006 consolidated balance sheet, what amount should be reported as total retained earnings?

 

  1. $1,240,000
  2. $1,360,000
  3. $1,380,000
  4. $1,800,000

Answers

SmartExpert
(118)
Status NEW Posted 05 Nov 2017 10:11 PM My Price 5.00

Owe-----------n C-----------orp----------- an-----------d S-----------har-----------p C-----------orp-----------

Attachments

file 1509920077-Owen Corp and Sharp Corp.xlsx preview (172 words )
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