Parent Co. purchases 100 percent of Son Company on January 1,20X1, when Parent’s retained earnings balance is $520,000 and Son’sis $150,000. During 20X1, Son reports $15,000 of net income anddeclares $6,000 of dividends. Parent reports $105,000 of separateoperating earnings plus $15,000 of equity-method income from its100 percent interest in Son; Parent declares dividends of$40,000.
4. Based on the preceding information, what is Parent’spost-closing retained earnings balance on December 31, 20X1?
485,000
505,000
525,000
600,000
5. Based on the preceding information, what is Son’spost-closing retained earnings balance on December 31, 20X1?
141,000
150,000
159,000
165,000
6. Based on the preceding information, what is the consolidatedretained earnings balance on December 31, 20X1?
470,000
585,000
600,000
759,000
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