Catalyst Corporation Acquired 90 Percent of Trigger Corporation's Common Stock

question 22

Multiple Choice

Catalyst Corporation acquired 90 percent of Trigger Corporation's common stock on September 30,2008 for $225,000.At that date,the fair value of the noncontrolling interest was $25,000.On January 1,2008,Trigger reported the following stockholders' equity balances:
Trigger reported net income of $80,000 in 2008,earned uniformly throughout the year,and declared and paid dividends of $10,000 on June 30 and $30,000 on December 31,2008.Catalyst reported retained earnings of $250,000 on January 1,2008,and had 2008 income of $120,000 from its separate operations.Catalyst paid dividends of $50,000 on December 31,2008.Catalyst accounts for its investment in Trigger Corporation using the basic equity method.

-Based on the information provided,what is the amount of consolidated retained earnings as of December 31,2008?

• A)$340,000
• B)$250,000
• C)$338,000
• D)$388,000

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