Phips CoPurchases 100 Percent of Sips Company on January 1,20X2,when Phips

question 50

Multiple Choice

Phips Co.purchases 100 percent of Sips Company on January 1,20X2,when Phips' retained earnings balance is $320,000 and Sips' is $120,000.During 20X2,Sips reports $20,000 of net income and declares $8,000 of dividends.Phips reports $125,000 of separate operating earnings plus $20,000 of equity-method income from its 100 percent interest in Sips;Phips declares dividends of $35,000.
-Based on the preceding information,what is the consolidated retained earnings balance on December 31,20X2?

• A)$402,000
• B)$410,000
• C)$430,000
• D)$562,000

---

Definitions:

United States

A country in North America comprising 50 states, known for its diverse geography, culture, and significant impact on global affairs.

User Requirements

Specifications or needs expressed by users that should be fulfilled by a system or product to satisfy its intended use in a particular context.

System Designs

System designs refer to the process of defining the architecture, components, modules, interfaces, and data for a system to satisfy specified requirements.

RAD

Rapid Application Development, a software development methodology that emphasizes quick prototype releases and iterations to expedite development and elicit early user feedback.