Fesler Inc

question 29

Essay

Fesler Inc. acquired all of the outstanding common stock of Pickett Company on January 1, 2012. Annual amortization of $22,000 resulted from this transaction. On the date of the acquisition, Fesler reported retained earnings of $520,000 while Pickett reported a $240,000 balance for retained earnings. Fesler reported net income of $100,000 in 2012 and $68,000 in 2013, and paid dividends of $25,000 in dividends each year. Pickett reported net income of $24,000 in 2012 and $36,000 in 2013, and paid dividends of $10,000 in dividends each year.
Assume that Fesler's reported net income includes Equity in Subsidiary Income.
If the parent's net income reflected use of the initial value method, what were the consolidated retained earnings on December 31, 2013?

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Definitions:

Economic Depression

A prolonged period marked by a significant decline in economic activity across the market, widespread unemployment, and a decrease in production and consumer spending.

Impressment

The act of taking men into a navy by force and with or without notice, commonly practiced by British Royal Navy against American seamen in the lead up to the War of 1812.

War Hawks

A term used to describe members of Congress who were pro-war, particularly during the period leading up to the War of 1812, advocating for conflict with Britain.

Annexing Canada

The idea or historical attempts to bring Canada or parts thereof under the jurisdiction of the United States.