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How much the Parminter Investment in Sanchez preferred

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Question - Parminter Corporation owns (acquired years ago when book values were equal to fair values) an 80% interest in the common stock of Sanchez Corporation and 20% of Sanchez's preferred stock on December 31, 2005. Sanchez had 2005 net income of $30,000. No dividends were issued. Sanchez's equity was as follows:

10% cumulative, non-participating preferred stock $50,000

Common stock 350,000

Required -

1. How much should the Parminter's Investment in Sanchez preferred and common (total) change during 2005?

a. $9,000.

b. $21,000.

c. $25,000.

d. $30,000.

2. What should be the total non-controlling interest share in net income of Sanchez in the consolidated financial statements?

a. $9,000.

b. $21,000.

c. $25,000.

d. $30,000.

Reference no: EM133077069

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