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In ABC's December 31, year 1 consolidated balance sheet, what amount should be reported as total retained earnings?

In ABC's December 31, year 1 consolidated balance sheet, what amount should be reported as total retained earnings?

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 25E
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On January 1, 20x1, ABC Corporation purchased all of XYZ Corporation's common stock for $1,200,000. On that date, the fair values of XYZ's assets and liabilities equaled their carrying amounts of $1,320,000 and $320,000, respectively. During year 1, XYZ paid cash dividends of $20,000. Selected information from the separate balance sheets and income statements of ABC and XYZ as of December 31, year 1, and for the year then ended follows: ABC Corporation (Column 1), XYZ Corporation (Column 2) * Balance sheet accounts Investment in subsidiary Retained earnings Total stockholders' equity $1,320,000 1,240,000 2,620,000 560,000 1,120,000 Income statement accounts Operating income Equity in earnings of Sharp 200,000 420,000 140,000 400,000 Net income 140.000 In Owen's December 31, year 1 consolidated balance sheet, what amount should be reported as total retained earnings? In ABC's December 31, year 1 consolidated balance sheet, what amount should be reported as total retained earnings?
Transcribed Image Text:On January 1, 20x1, ABC Corporation purchased all of XYZ Corporation's common stock for $1,200,000. On that date, the fair values of XYZ's assets and liabilities equaled their carrying amounts of $1,320,000 and $320,000, respectively. During year 1, XYZ paid cash dividends of $20,000. Selected information from the separate balance sheets and income statements of ABC and XYZ as of December 31, year 1, and for the year then ended follows: ABC Corporation (Column 1), XYZ Corporation (Column 2) * Balance sheet accounts Investment in subsidiary Retained earnings Total stockholders' equity $1,320,000 1,240,000 2,620,000 560,000 1,120,000 Income statement accounts Operating income Equity in earnings of Sharp 200,000 420,000 140,000 400,000 Net income 140.000 In Owen's December 31, year 1 consolidated balance sheet, what amount should be reported as total retained earnings? In ABC's December 31, year 1 consolidated balance sheet, what amount should be reported as total retained earnings?
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