On January 1, 2006, Jarel bought 80 percent of the outstanding voting stock of Suarez for $260,000. Of this payment, $20,000 was allocated to equipment (with a five-year life) that had been undervalued on Suarez's books by $25,000. Any excess purchase price was allocated to unrecorded secret formulas and amortized over a 20-year life. As of December 31, 2006, the financial statements appeared as follows:
..............................................Jarel.................Suarez
Revenues...............................(300,000)..........(200,000)
Cost of goods sold ....................140,000..........80,000
Expenses................................20,000............10,000
Net income.............................(140,000)..........(110,000)
Retained earnings, 1/1/06..........(300,000)..........(150,000)
Net income.............................(140,000)..........(110,000)
Dividends paid............................. - ................. -
Retained earnings, 12/31/06 .......(440,000)..........(260,000)
Cash and receivables..................210,000...........90,000
Inventory ...............................150,000...........110,000
Investment in Jarel....................260,000.......... -
Equipment (net)........................440,000...........300,000
Total assets.............................1,060,000..........500,000
Liabilities...............................(420,000).........(140,000)
Comon stock............................(200,000)..........(100,000)
Retained earnings, 12/31/06 ........(440,000)..........(260,000)
Total liabilities and equities.........(1,060,000)........(500,000)

During 2006, Jarel bought inventory for $80,000 and sold it to Suarez for $100,000. Suarez had paid for only half of this purchase by the end of the year. Of these goods, Suarez still purchases 60 percent on December 31.

10. What is the total of consolidated revenues? A.) 500,000 B.) 460,000 C.) 420,000 D.) 400,000
11. What is the total of consolidated expense? A.) 30,000 B.) 36,000 C.) 33,000 D.) 39,000