On January 1, 2017, Perla Corporation purchased all of the outstanding common stock of Siena Company for $220,000 cash. On that date, Siena's net assets had a book value of $148,000. Equipment with an 8-year life was undervalued by $20,000 in Siena's financial records. Siena has a database that is valued at $52,000 and will be amortized over ten years. Siena reported net income of $25,000 in the year of acquisition and $32,500 in the following year. Dividends of $2,500 and paid for 2017 and 2018. re declared For each of the two companies, selected account balances as of December 31, 2019 are as follows: Perla Siena Revenues $ 250,000 $ 142,500 Expenses Equipment (net) Retained Earnings, beginning of the year 175,000 100,000 125,000 150,000 000 Dividends Paid 25,000 5,000 What is the consolidated net income for 2019 ?

On January 1, 2017, Perla Corporation purchased all of the outstanding common stock of Siena Company for $220,000 cash. On that date, Siena's net assets had a book value of $148,000. Equipment with an 8-year life was undervalued by $20,000 in Siena's financial records. Siena has a database that is valued at $52,000 and will be amortized over ten years. Siena reported net income of $25,000 in the year of acquisition and $32,500 in the following year. Dividends of $2,500 and paid for 2017 and 2018. re declared For each of the two companies, selected account balances as of December 31, 2019 are as follows: Perla Siena Revenues $ 250,000 $ 142,500 Expenses Equipment (net) Retained Earnings, beginning of the year 175,000 100,000 125,000 150,000 000 Dividends Paid 25,000 5,000 What is the consolidated net income for 2019 ?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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