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Use this information to answer the following questions 10-12 (Algo) (LO 3-3a) Skip to question [The following information applies to the questions displayed below.] On
Use this information to answer the following questions 10-12 (Algo) (LO 3-3a)
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[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 $730,000 cash. At January 1, 2019, Sedonas net assets had a total carrying amount of $511,000. Equipment (eight-year remaining life) was undervalued on Sedonas financial records by $122,000. 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 $10,000 dividend. Sedona recorded net income of $81,000 in 2019 and $92,500 in 2020.
Selected account balances from the two companies individual records were as follows:
Phoenix | Sedona | |||||
2021 Revenues | $ | 601,000 | $ | 329,400 | ||
2021 Expenses | 380,000 | 229,000 | ||||
2021 Income from Sedona | 60,900 | |||||
Retained earnings 12/31/21 | 337,100 | 202,300 | ||||
What is Phoenixs consolidated retained earnings balance at December 31, 2021?
Multiple Choice
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$306,900
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$221,000
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$316,900
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$337,100
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