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Question 8 Not yet answered Marked out of 1.00 P Flag question Assume an investor acquired 100% of the voting common stock of an investee on January 1, 2012 in a transaction that qualifies as a business combination. As a result of the acquisition, the investor recognized no goodwill and no bargain purchase gain in the post-acquisition consolidated financial statements (i.e., all of the resulting Acquisition Accounting Premium relates to identifiable net assets). The investor uses the equity method to account for its pre-consolidation investment in the investee. In addition, there are no intercompany transactions between the investor and investee. The following summarized pre-consolidation financial statement information is for the year ending December 31, 2019: Income Statement Investor Investee Revenues $2,232,000 $307,200 Income from Investee 141,600 Expenses (1,800,000) (156,000) Consolidated net income 573,600 151,200 NCI Net income $573,600 $151,200 Statement of Retained Earnings Retained earnings, January 1 $720,000 $36,000 Net income 573,600 151,200 Dividends declared (60,000) (36,000) Retained earnings, December 31 $1,233,600 $151,200 Balance Sheet Investment in Investee $283,200 $0 All other assets 4,598,400 384,000 Total assets $4,881,600 $384,000 Liabilities $2,880,000 $128,000 Common stock and additional paid-in capital 768,000 84,000 Retained earnings 1,233,600 151,200 Total liabilities and equity $4,881,600 $384,000 Understanding consolidated balances What amount of "expenses" will appear in the consolidated income statement for the year ending December 31, 2019? $1,800,000 $1,956,000 $1,975,200 $1,965,600 Understanding consolidated balances What amount of "net income" will be reported in the consolidated income statement for the year ending December 31, 2019? $141,600 $573,600 $151,000 $564,000 Understanding consolidated balances What amount of "retained earnings" will appear in the consolidated balance sheet at December 31, 2019? $1,348,800 $1,384,800 $1,233,600 $1,243,200

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