The following information applies to the questions displayed below.]

On January 1, 2019, Phoenix Co. acquired 100 percent of the outstanding voting shares of Sedona Inc. for $680,000 cash. At January 1, 2019, Sedonas net assets had a total carrying amount of $476,000. Equipment (eight-year remaining life) was undervalued on Sedonas financial records by $88,000. 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 $32,500 dividend. Sedona recorded net income of $96,000 in 2019 and $109,500 in 2020.

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

	Phoenix			Sedona
2021 Revenues	$	547,000		$	327,800
2021 Expenses		373,000			235,000
2021 Income from Sedona		52,800
Retained earnings 12/31/21		284,000			214,800

1) What is consolidated net income for Phoenix and Sedona for 2021?

Multiple Choice

$226,800

$261,800

$174,000

$251,800

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

Multiple Choice

$251,800

$284,000

$174,000

$261,800

3) On its December 31, 2021, consolidated balance sheet, what amount should Phoenix report for Sedonas customer list?

Multiple Choice

$29,000

$23,200

$11,600

$58,000