Jans Inc Acquired All of the Outstanding Common Stock of Tysk

question 4

Multiple Choice

Jans Inc. acquired all of the outstanding common stock of Tysk Corp. on January 1, 2011, for $372,000. Equipment with a ten-year life was undervalued on Tysk's financial records by $46,000. Tysk also owned an unrecorded customer list with an assessed fair value of $67,000 and an estimated remaining life of five years. Tysk earned reported net income of $180,000 in 2011 and $216,000 in 2012. Dividends of $70,000 were paid in each of these two years. Selected account balances as of December 31, 2013, for the two companies follow. $$\begin{array} { l r r } & { \text { Jans } } & { \text { Tysk } } \\\text { Revenues } & \$ 1,080,000 & \$ 840,000 \\\text { Expenses } & 480,000 & 600,000 \\\text { Investment income } & \text { Not given } & 0 \\\text { Retained earnings, 1/1/13 } & 840,000 & 600,000 \\\text { Dividends paid } & 132,000 & 70,000\end{array}$$ If the partial equity method had been applied, what was 2013 consolidated net income?

• A)$840,000.
• B)$768,400.
• C)$822,000.
• D)$240,000.
• E)$600,000.

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