the investor recognized no goodwill and no bargain purchase

the investor recognized no goodwill and no bargain purchase gain in the post-acquisition consolidated financial statements 0.e, all of the resulting Acquisition Accounting Premium relates so dentifiable 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 nvestor and investee. The following summarired pre-consolidation financial statement information is for the year ending December 31, 2016 Revenues 1,920000 8256 000 20,000 txpenses Consolidated net income NC Net income Statement of Retained Earnings 760 00012000 760 000 12.000 601 800 $32.000 60,000 128000 Net inceme Dividends decered Retained eenings December 3 Balance Sheet 1,310 400 $128000 232000 830 400 320,000 other assers Total asses Liablities Common sock and addisional paid-in capital Retained earning 4062 400 320.000 2112000 128.000 640.000 6,000 10.400 128,000 4.062 400 320.000 What amount of total assetst will appear in the consolidated balance sheet at December 31, 20167 $4,382,400 $3,830,400 $4,062,400 $4,190,400

Solution

Solution: (D) $4,190,400

working:

Calculation of Goodwill = Cost of Investment - Investee\'s Stockholder fund

= $232,000 - ($64000 + 128,000)

= $40,000

Total Assets in Consiladation statement

= Investor\'s total assets except Investment + Investee\'s total assets + Goodwill

= 3,830,400 + 320,000 + 40,000

= $4,190,400