On January 1, Year 4, Pane Corp. exchanged 150,000 shares of its $20 par value common stock for all of Sky Corp.s common stock. At that date, the fair value of Panes common stock issued was equal to the fair value of the identifiable assets acquired and liabilities assumed. Both corporations continued to operate as separate businesses, maintaining accounting records with years ending December 31. In its separate statements, Pane accounts for the investment using the equity method. Information from separate company operations follows: PaneSkyRetained earnings -- 12/31/Yr 3$3,200,000$925, 000 Dividends paid -- 3/25/Yr 4750, 000200, 000lf consolidated net income was $800,000, what amount of retained earnings should Pane report in its December 31, Year 4, consolidated balance sheet? A. $3,250,000B. $3,050, 000C. $4, 125, 000D. $4, 925,000

On January 1, Year 4, Pane Corp. exchanged 150,000 shares of its $20 par value common stock for all of Sky Corp.s common stock. At that date, the fair value of Panes common stock issued was equal to the fair value of the identifiable assets acquired and liabilities assumed. Both corporations continued to operate as separate businesses, maintaining accounting records with years ending December 31. In its separate statements, Pane accounts for the investment using the equity method. Information from separate company operations follows: PaneSkyRetained earnings -- 12/31/Yr 3$3,200,000$925, 000 Dividends paid -- 3/25/Yr 4750, 000200, 000lf consolidated net income was $800,000, what amount of retained earnings should Pane report in its December 31, Year 4, consolidated balance sheet? A. $3,250,000B. $3,050, 000C. $4, 125, 000D. $4, 925,000

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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