CASE 4 (Q 20): Jones Inc. acquired all of the outstanding common stock of Tyler Corp. on January 1, 2011, for $372,000. Equipment with a ten-year life was undervalued on Tyler's financial records by $46,000. Tyler also owned an unrecorded customer list with an assessed fair value of $67,000 and an estimated remaining life of five years. Tyler earned reported net income of $180,000 in 2011 and $216,000 in 2012. Dividends of $70,000 were paid in each of these two years. Selected account balances as of December 31, 2013, for the two companies follow. Revenues Expenses Investment income Dividends paid Jones $1,080,000 Tyler $840,000 480,000 600,000 Not given 0 Retained earnings, 1/1/13 840,000 600,000 132,000 70,000 Question 20 If the partial equity method had been applied, what was 2013 consolidated net income? A) $840,000. B) $768,400. C) $822,000. D) $240,000. E) $600,000.
CASE 4 (Q 20): Jones Inc. acquired all of the outstanding common stock of Tyler Corp. on January 1, 2011, for $372,000. Equipment with a ten-year life was undervalued on Tyler's financial records by $46,000. Tyler also owned an unrecorded customer list with an assessed fair value of $67,000 and an estimated remaining life of five years. Tyler earned reported net income of $180,000 in 2011 and $216,000 in 2012. Dividends of $70,000 were paid in each of these two years. Selected account balances as of December 31, 2013, for the two companies follow. Revenues Expenses Investment income Dividends paid Jones $1,080,000 Tyler $840,000 480,000 600,000 Not given 0 Retained earnings, 1/1/13 840,000 600,000 132,000 70,000 Question 20 If the partial equity method had been applied, what was 2013 consolidated net income? A) $840,000. B) $768,400. C) $822,000. D) $240,000. E) $600,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:CASE 4 (Q 20):
Jones Inc. acquired all of the outstanding common stock of Tyler Corp. on January 1, 2011,
for $372,000. Equipment with a ten-year life was undervalued on Tyler's financial records by
$46,000. Tyler also owned an unrecorded customer list with an assessed fair value of
$67,000 and an estimated remaining life of five years.
Tyler earned reported net income of $180,000 in 2011 and $216,000 in 2012. Dividends of
$70,000 were paid in each of these two years.
Selected account balances as of December 31, 2013, for the two companies follow.
Revenues
Expenses
Investment income
Dividends paid
Jones
$1,080,000
Tyler
$840,000
480,000
600,000
Not given
0
Retained earnings, 1/1/13
840,000
600,000
132,000
70,000
Question 20
If the partial equity method had been applied, what was 2013 consolidated net income?
A) $840,000.
B) $768,400.
C) $822,000.
D) $240,000.
E) $600,000.
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