Question

On January 1, 2019, Pali Company acquired 75% of Silicon Company's voting stock for $44,300 in cash. The noncontrolling interest had an estimated fair value of $12,700. Silicon's assets and liabilities at the date of acquisition were reported at amounts approximating fair value, but it had previously unreported indefinite life identifiable intangibles valued at $21,000. Silicon's total shareholders' equity at January 1, 2019 was as follows:

Capital stock	$ 2,000
Retained earnings	2,900
Accumulated other comprehensive income	100
Total	$ 5,000

It is now December 31, 2020 (two years later). Identifiable intangibles impairment for 2019 was $1,000 and there was no goodwill impairment. There is no identifiable intangibles impairment for 2020, but goodwill impairment for 2020 is $200. Pali uses the complete equity method to account for its investment. December 31, 2020 trial balances for Pali and Silicon follow.

	Pali Dr (Cr)	Silicon Dr (Cr)
Current assets	$ 5,000	$   1,000
Property, net	42,000	28,000
Intangibles	–	–
Investment in Silicon	45,892	–
Goodwill	–	–
Liabilities	(53,887)	(20,664)
Capital stock	(15,000)	(2,000)
RE, beginning	(20,000)	(4,400)
AOCI, beginning	(1,100)	(116)
Sales revenue	(25,000)	(14,000)
Equity in net income of Silicon	(1,190)	–
Equity in OCI of Silicon	(15)	–
Cost of goods sold	20,000	9,000
Operating expenses	4,000	3,200
Other comprehensive income	(700)	(20)
Total	$ 0	$ 0

What is consolidated comprehensive income for 2020?

	A.	$3,320
	B.	$2,905
	C.	$2,185
	D.	$2,600

Answer 1

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