E3-3 [Based on AICPA] General problems 1. Cobb Company's current receivables from affiliated companies at December 31, 2016, are (1) a $75,000 cash advance to Hill Corporation (Cobb owns 30 percent of the voting stock of Hill and accounts for the investment by the equity method), (2) a receivable of $260,000 from Vick Corporation for administrative and selling services (Vick is 100 percent owned by Cobb and is included in Cobb's consolidated financial statements), and (3) a receivable of $200,000 from Ward Corporation for merchandise sales on credit (Ward is a 90 percent-owned, unconsolidated subsidiary of Cobb accounted for by the equity method). In the current assets section of its December 31, 2016, consolidated balance sheet, Cobb should report accounts receivable from investees in the amount of: a $180,000 b $255,000 C $275,000 d $535,000 Use the following information in answering questions 2 and 3. On January 1, 2016, Pop Corporation purchased all of Son Corporation's common stock for $2,400,000. On that date, the fair values of Son's assets and liabilities equaled their carrying amounts of $2,640,000 and $640,000, respec- tively. Pop's policy is to amortize intangibles other than goodwill over 10 years. During 2016, Son paid cash dividends of $40,000. Selected information from the separate balance sheets and income statements of Pop and Son as of December 31, 2016, and for the year then ended follows (in thousands): Pop Son Balance Sheet Accounts Investment in subsidiary $2,640 Retained earnings 2,480 $ 1,120 Total stockholders' equity 5,240 2,240 Income Statement Accounts Operating income $ 840 $ 400 Equity in earnings of Son 280 Net income 800 280 2. In Pop's 2016 consolidated income statement, what amount should be reported for amortization of goodwill? a $0 b $24,000 C $36,000 d $40,000 3. In Pop's December 31, 2016, consolidated balance sheet, what amount should be reported as total retained earnings? a $2,480,000 b $2,720,000 C $2,760,000 d $3,600,000