Kane acquired Tucson Company on 1/1/21. This acquisition results in $1,000 in excess consideration over book value, which is being amortized at $20 per year. There was no goodwill in the combination. Tucson reported net income of $400 in 2021 and paid dividends of $100.

Assume the initial value method is used. In the year subsequent to acquisition, what is the *C entry that must be made for consolidation purposes?

A)	Investment in Tucson	380
	Retained earnings		380
B)	Retained earnings	380
	Investment in Tucson		380
C)	Investment in Tucson	280
	Retained earnings		280
D)	Retained earnings	280
	Investment in Tucson		280
E)	Additional paid-in capital	280
	Retained earnings		280

Multiple Choice

• Entry A.

• Entry B.

• Entry C.

• Entry D.

• Entry E.