What is the total of consolidated cost of goods sold?

a. $140,000

b. $152,000

c. $132,000

d. $145,000

On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000 cash consideration. The remaining 20 percent of Suarez had an acquisition-date fair value of $65,000. On January 1, Suarez possessed equipment (five-year remaining life) that was undervalued on its books by $25,000. Suarez also had developed several secret formulas that Jarel assessed at $50,000. These formulas, although not recorded on Suarez’s financial records, were estimated to have a 20-year future life.

As of December 31, the financial statements appeared as follows:

Included in the above statements, Jarel sold inventory costing $80,000 to Suarez for $100,000. Of these goods, Suarez still owns 60 percent on December 31.

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Jarel Suarez $ (300,000) 140,000 20,000 Revenues. Cost of goods sold. Expenses . S(200,000) 80,000 10,000 $ (140,000) $ (300,000) (140,000) -0- Net income S(110,000) Retained earnings, 1/1 Net income . Dividends declared. S(150,000) (110,000) -0- $ (440,000) $ 210,000 150,000 260,000 440,000 Retained earnings, 12/31 S(260,000) $ 90,000 110,000 Cash and receivables Inventory. Investment in Suarez. Equipment (net). -0- 300,000 $ 1,060,000 $ (420,000) (200,000) (440,000) Total assets $ 500,000 Liabilities Common stock Retained earnings, 12/31 S(140,000) (100,000) (260,000) Total liabilities and equities. S(1,060,000) $(500,000)