On January 1,2004,Plimsol Company acquired 100 percent of Shipping Corporation's voting shares,at underlying book value.Plimsol uses the cost method in accounting for its investment in Shipping.Shipping's retained earnings was $75,000 on the date of acquisition.On December 31,2004,the trial balance data for the two companies are as follows:

-Based on the information provided,what amount of total stockholder's equity will be reported in the consolidated balance sheet prepared on December 31,2004?
A)$190,000
B)$335,000
C)$460,000
D)$310,000

Question

On January 1,2004,Plimsol Company acquired 100 percent of Shipping Corporation's voting shares,at underlying book value.Plimsol uses the cost method in accounting for its investment in Shipping.Shipping's retained earnings was $75,000 on the date of acquisition.On December 31,2004,the trial balance data for the two companies are as follows:
 
-Based on the information provided,what amount of total stockholder's equity will be reported in the consolidated balance sheet prepared on December 31,2004?
A)$190,000 
B)$335,000 
C)$460,000 
D)$310,000

Quizplus · Accepted Answer

The total stockholder's equity in a consolidated balance sheet includes the parent company's equity and the non-controlling interest. The correct choice is based on the given data and calculations that lead to $335,000 as the total stockholder's equity.

On January 1,2004,Plimsol Company Acquired 100 Percent of Shipping Corporation's