On January 1, 2012, Cale Corp Kaltop Earned Net Income for 2012 of $126,000 and Paid

question 101

Multiple Choice

On January 1, 2012, Cale Corp. paid $1,020,000 to acquire Kaltop Co. Kaltop maintained separate incorporation. Cale used the equity method to account for the investment. The following information is available for Kaltop's assets, liabilities, and stockholders' equity accounts on January 1, 2012: $\begin{array}{lrr}&\text { Book } & \text { Fair } \\&\text { Value } & \text { Value }\\\text { Current assets } & \$ 120,000 & \$ 120,000 \\\text { Land } & 72,000 & 192,000 \\\text { Building (twenty year life) } & 240,000 & 268,000 \\\text { Equipment (ten year life) } & 540,000 & 516,000 \\\text { Current liabilities } & 24,000 & 24,000 \\\text { Long -term liabilities } & 120,000 & 120,000 \\\text { Common stock } & 228,000 & \\\text { Additional paid -in capital } & 384,000 & \\\text { Retained earnings } & 216,000 &\end{array}$ Kaltop earned net income for 2012 of $126,000 and paid dividends of $48,000 during the year. If Cale Corp. had net income of $444,000 in 2012, exclusive of the investment, what is the amount of consolidated net income?

• A)$569,000.
• B)$570,000.
• C)$571,000.
• D)$566,400.
• E)$444,000.

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Definitions:

Self-control

The capacity to control one's feelings, ideas, and actions when confronted with urges and impulses.

Authoritative

Pertaining to a source of information or control that is recognized for its reliability and accuracy.

Self-controlled

The skill of managing one's emotional, cognitive, and behavioral responses amidst temptations and impulses.

Withdrawal of Love

The act of withholding affection or emotional support as a means of exerting control or expressing displeasure.