What is the total of consolidated cost of goods sold?
a. $140,000.
b. $152,000.
c. $132,000.
d. $145,000.

Use the following data for problem:
On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000 cash consideration. The remaining 20 percent of Suarez had an acquisition-date fair value of $65,000. On January 1, Suarez possessed equipment (5-year life) that was undervalued on its books by $25,000. Suarez also had developed several secret formulas that Jarel assessed at $50,000. These formulas, although not recorded on Suarez€™s financial records, were estimated to have a 20-year future life. As of December 31, the financial statements appeared as follows:

During the year, Jarel bought inventory for $80,000 and sold it to Suarez for $100,000. Of these goods, Suarez still owns 60 percent on December31.

Transcribed Image Text:

Jarel Suarez Revenues Cost of goods sold.--. .. .- Expenses 140,000 20,000 $1200,000) 80,000 10,000 Net income Retained earnings, 1/1 Net income Dividends paid 5 (140.000) s (300,000) 1 5(150,000) (110,000) (140,000) _ 5 1440,000 $260,000 Retained earnings, 1231 Cash and receivables Inventory Investment in Suarez Equipment (net) 210,000 90,000 110,000 300,000 5 1.060,000 500,000 (420,000) (140,000) 150,000 260,000 440,000 Total assets Liabilities Common stock Retained earnings, 123 (200,000) (440,000) (260,000) (100,000) 1231...-. . Total liabilities and equities