Question

Provided are the consolidated trial balances of a parent and its less-than-wholly-owned subsidiary.

Account	Dr (Cr)
Current assets	$ 4,000
Property, net	95,000
Intangible assets, net	15,000
Goodwill	100,000
Liabilities	(180,140)
Capital stock	(10,000)
Retained earnings, beginning	(16,000)
Accumulated other comprehensive income, beginning	(500)
Noncontrolling interest	(2,000)
Dividends	500
Sales revenue	(390,000)
Cost of sales and operating expenses	385,000
Other comprehensive income	(1,000)
Noncontrolling interest in net income	150
Noncontrolling interest in other comprehensive loss	(10)
Total	$ 0

On the consolidated balance sheet, consolidated retained earnings at the end of the year is:

	A.	$20,350
	B.	$20,850
	C.	$20,500
	D.	$16,000

Answer 1

Answer is option A

A. $20,350

consolidated retained earnings at the end of the year = Retained earnings, beginning + (net income- Noncontrolling interest in net income)- Noncontrolling interest = Retained earnings, beginning +((Sales revenue- Cost of sales and operating expenses) -Noncontrolling interest in net income)- Noncontrolling interest) = 16000+((390000-385000)-150)-500 = $20350