On January 1, 2021, Pride, Inc. acquired 80% of the outstanding voting common stock of Strong Corp. for $364,000. There is no active market for Strong’s stock. Of this payment, $28,000 was allocated to equipment (with a five-year life) that had been undervalued on Strong's books by $35,000. Any remaining excess was attributable to goodwill, which has not been impaired. As of December 31, 2021, before preparing the consolidated worksheet, the financial statements appeared as follows: Pride, Inc. Strong Corp. Revenues $ 420,000 $ 280,000 Cost of goods sold (196,000 ) (112,000 ) Operating expenses (28,000 ) (14,000 ) Net income $ 196,000 $ 154,000 Retained earnings, 1/1/21 $ 420,000 $ 210,000 Net income (above) 196,000 154,000 Dividends paid 0 0 Retained earnings, 12/31/21 $ 616,000 $ 364,000 Cash and receivables $ 294,000 $ 126,000 Inventory 210,000 154,000 Investment in Strong Corp 364,000 0 Equipment (net) 616,000 420,000 Total assets $ 1,484,000 $ 700,000 Liabilities $ 588,000 $ 196,000 Common stock 280,000 140,000 Retained earnings, 12/31/21 (above) 616,000 364,000 Total liabilities and stockholders’ equity $ 1,484,000 $ 700,000 During 2021, Pride bought inventory for $112,000 and sold it to Strong for $140,000. Only half of the inventory purchase price had been remitted to Pride by Strong at year-end. As of December 31, 2021, 60% of these goods remained in the company's possession. What is the total of consolidated revenues at December 31, 2021?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 18E

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On January 1, 2021, Pride, Inc. acquired 80% of the outstanding voting common stock of Strong Corp. for $364,000. There is no active market for Strong’s stock. Of this payment, $28,000 was allocated to equipment (with a five-year life) that had been undervalued on Strong's books by $35,000. Any remaining excess was attributable to goodwill, which has not been impaired. As of December 31, 2021, before preparing the consolidated worksheet, the financial statements appeared as follows: Pride, Inc. Strong Corp. Revenues $ 420,000 $ 280,000 Cost of goods sold (196,000 ) (112,000 ) Operating expenses (28,000 ) (14,000 ) Net income $ 196,000 $ 154,000 Retained earnings, 1/1/21 $ 420,000 $ 210,000 Net income (above) 196,000 154,000 Dividends paid 0 0 Retained earnings, 12/31/21 $ 616,000 $ 364,000 Cash and receivables $ 294,000 $ 126,000 Inventory 210,000 154,000 Investment in Strong Corp 364,000 0 Equipment (net) 616,000 420,000 Total assets $ 1,484,000 $ 700,000 Liabilities $ 588,000 $ 196,000 Common stock 280,000 140,000 Retained earnings, 12/31/21 (above) 616,000 364,000 Total liabilities and stockholders’ equity $ 1,484,000 $ 700,000 During 2021, Pride bought inventory for $112,000 and sold it to Strong for $140,000. Only half of the inventory purchase price had been remitted to Pride by Strong at year-end. As of December 31, 2021, 60% of these goods remained in the company's possession. What is the total of consolidated revenues at December 31, 2021?

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