On June 1,2014,Puell Company acquired 100% of the stock of Sorrell Inc.On this date,Puell had Retained Earnings of $100,000 and Sorrell had Retained Earnings of $50,000.On December 31,2014,Puell had Retained Earnings of $120,000 and Sorrell had Retained Earnings of $60,000.The amount of Retained Earnings that appeared in the December 31,2014 consolidated balance sheet was
A)$120,000.
B)$130,000.
C)$170,000.
D)$180,000.

Question

Quizplus · Accepted Answer

In a consolidated balance sheet, only the parent company's retained earnings are reported. Therefore, the retained earnings on December 31, 2014, would be Puell's retained earnings of $120,000.

On June 1,2014,Puell Company Acquired 100% of the Stock of Sorrell