Problem: Cashen Co. paid $2,400,000 to purchase all of the common stock of Janex Corp. on January 1, 2001. Janex's reported earnings for 2003 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.
Q1. 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
Q2. 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
Q3. 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