Following Are Selected Accounts for Green Corporation and Vega Company

question 29

Multiple Choice

Following are selected accounts for Green Corporation and Vega Company as of December 31, 2015. Several of Green's accounts have been omitted. $$\begin{array} { l r r } & \text { Green } &{ \text { Vega } } \\\text { Revenues } & \$ 900,000 & \$ 500,000 \\\text { Cost of goods sold } & 360,000 & 200,000 \\\text { Depreciation expense } & 140,000 & 40,000 \\\text { Other expenses } & 100,000 & 60,000 \\\text { Equity in Vega's income } & ? & \\\text { Retained earnings, 1/1/15 } & 1,350,000 & 1,200,000 \\\text { Dividends } & 195,000 & 80,000 \\\text { Current assets } & 300,000 & 1,380,000 \\\text { Land } & 450,000 & 180,000 \\\text { Building (net) } & 750,000 & 280,000 \\\text { Equipment (net) } & 300,000 & 500,000 \\\text { Liabilities } & 600,000 & 620,000 \\\text { Common stock } & 450,000 & 80,000 \\\text { Additional paid-in capital } & 75,000 & 320,000\end{array}$$ Green acquired 100% of Vega on January 1, 2011, by issuing 10,500 shares of its $10 par value common stock with a fair value of $95 per share. On January 1, 2011, Vega's land was undervalued by $40,000, its buildings were overvalued by $30,000, and equipment was undervalued by $80,000. The buildings have a 20-year life and the equipment has a 10-year life. $50,000 was attributed to an unrecorded trademark with a 16-year remaining life. There was no goodwill associated with this investment. Compute the December 31, 2015, consolidated total expenses.

• A)$620,000.
• B)$280,000.
• C)$900,000.
• D)$909,625.
• E)$299,625.

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Definitions:

Quasi-Need Reduction

The concept that certain actions may temporarily reduce the strength of a need without it being completely satisfied.

Psychological Environment

The subjective perception of one's surroundings that can significantly influence mental and emotional states.

Repression

A psychological process where individuals unconsciously block out painful or unpleasant memories, thoughts, or desires.

Cognition

The process of learning and understanding obtained through mental activity, experiences, and using the senses.