Question & Answer: On January 1, 2013, Phoenix Co. acquired 100 percent of the outstanding voting shares of Sedona Inc. for $791, 500 cash. At January 1, 201…..

On January 1, 2013, Phoenix Co. acquired 100 percent of the outstanding voting shares of Sedona Inc. for $791, 500 cash. At January 1, 2013, Sedona’s net assets had a total carrying amount of $567, 500. Equipment (eight-year remaining life) was undervalued on Sedona’s financial records by $116, 800. Any remaining excess fair over book value was attributed to a customer list developed by Sedona (four-year remaining life), but not recorded on its books. Phoenix applies the equity method to account for its investment in Sedona. Each year since the acquisition, Sedona has declared a $30,000 dividend. Sedona recorded net income of $124,000 in 2013 and $136,000 in 2014. Selected account balances from the two companies’ individual records were as follows: What is consolidated net income for Phoenix and Sedona for 2015? $208,000. $229, 600. $264, 600. $254, 600.