On January 1, 2019, Phoenix Co. acquired 100 percent of the outstanding voting shares of Sedona Inc. for $706,000 cash. At January 1, 2019, Sedonas net assets had a total carrying amount of $494,200. Equipment (eight-year remaining life) was undervalued on Sedonas financial records by $92,000. Any remaining excess fair over book value was attributed to a customer list developed by Sedona (four-year remaining life), but not recorded on its books. Phoenix applies the equity method to account for its investment in Sedona. Each year since the acquisition, Sedona has declared a $29,500 dividend. Sedona recorded net income of $85,500 in 2019 and $103,100 in 2020.

Selected account balances from the two companies individual records were as follows:

	Phoenix			Sedona
2021 Revenues	$	611,000		$	380,000
2021 Expenses		418,000			283,000
2021 Income from Sedona		55,550
Retained earnings 12/31/21		304,750			206,900

Problem 3-11 (Algo) (LO 3-3a)

What is Phoenixs consolidated retained earnings balance at December 31, 2021?

Multiple Choice

• $193,000

• $304,750

• $283,550

• $273,550