Assuming the Combination Occurred Prior to 2009 and Was Accounted

question 3

Multiple Choice

Assuming the combination occurred prior to 2009 and was accounted for under the purchase method, what amount will be reported for consolidated retained earnings?

• A) $1,830,000.
• B) $1,350,000.
• C) $1,080,000.
• D) $1,560,000.
• E) $1,535,000.

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Definitions:

Company

A legal entity formed by a group of individuals to engage in and operate a business—commercial or industrial—enterprise.

Rising Prices

This term indicates an economic situation where the general level of prices of goods and services in an economy increases over a period.

Net Income

The amount of money a company earns after all expenses and taxes have been subtracted from its total revenue.