Question - Cashen Co. paid $2,400,000 to acquire all of the common stock of Janex Corp. on January 1, 2009. Janex's reported earnings for 2009 totaled $432,000 and it paid $120,000 in dividends during the year. The amortization of allocations related to the investment was $24,000. Cashen's net income, not including the investment, was $3,180,000 and it paid dividends of $900,000.
1. On the consolidated financial statements, what amount should have been shown for Equity in Subsidiary Earnings?
A. $432,000
B. $-0-
C. $408,000
D. $120,000
E. $312,000
2. On the consolidated financial statements, what amount should have been shown for consolidated dividends?
A. $900,000
B. $1,020,000
C. $876,000
D. $996,000
E. $948,000
3. What is the amount of consolidated net income?
A. $3,180,000
B. $3,612,000
C. $3,300,000
D. $3,588,000
E. $3,420,000