On january 1, 2013, pride co. purchased 90 percent of the outstanding voting shares of star inc. for $540,000 cash. the acquisition-date fair value of the noncontrolling interest was $60,000. at january 1, 2013, star's net assets had a total carrying amount of $420,000. equipment (8-year remaining life) was undervalued on star's financial records by $80,000. any remaining excess fair value over book value was attributed to a customer list developed by star (4-year remaining life), but not recorded on its books. star recorded income of $70,000 in 2013 and $80,000 in 2014. each year since the acquisition, star has paid a $20,000 dividend. at january 1, 2015, pride's retained earnings show a $250,000 balance.
selected account balances for the two companies from their separate operations were as follows:
pride star
2015 revenues $498,000 $285,000
2015 expenses 350,000 195,000
what is consolidated net income for 2015?
$238,000.
$197,500.
$203,000.
$194,000.