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Keefe, Incorporated, acquires 70% of George Company on September 1, 2005, and an additional 10% on April 1, 2006. Annual amortization of $5,000 relates to the first acquisition and $3,000 to the second. George reports the following figures for 2006:

Revenues $500,000
Expenses 400,000
Retained earnings 1/1/06 300,000
Dividends paid 50,000
Common Stock 200,000

Without regard for this investment, Keefe earns $300,000 in net income during 2006.

What is consolidated net income for 2006?

a) $365,000

b) $370,250

c) $372,000

d) $374,000

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9443655

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