Blank Corporation prepared the following summarized balance sheet on January 1, 20X1:

\section*{Required}
Select the correct answer for each of the following questions.
1. If Shepard Company purchases 80 percent of the common shares of Blank Corporation for \(\$ 90.000\), the amount reported as noncontrolling interest in the consolidated balance sheet is:

a. \(\$ 20,000\).

b. \(\$ 26,000\).

c. \(\$ 30,000\).

d. \(\$ 50,000\).
2. Shepard Company purchases 80 percent of the common shares of Blank Corporation for \(\$ 90,000\) and 70 percent of the preferred shares of Blank Corporation for \(\$ 21,000\). The amount reported as noncontrolling interest in the consolidated balance sheet of Shepard Company is:

a. \(\$ 9,000\).

b. \(\$ 20,000\).

c. \(\$ 29,000\).

d. \(\$ 50,000\).
3. Shepard Company purchases 80 percent of the common shares of Blank Corporation for \(\$ 90,000\) and 70 percent of the preferred shares of Blank Corporation for \(\$ 21,000\) on January 1 . 20X1. If Shepard Company's retained earnings is \(\$ 150,000\) on December 31, 20X0, the consolidated retained earnings reported immediately after the stock purchases is:

a. \(\$ 48,000\).

b. \(\$ 150,000\).

c. \(\$ 198.000\).

d. \(\$ 210,000\).

4. Shepard Company purchases 80 percent of the common shares of Blank Corporation for \(\$ 90,000\) and 70 percent of the preferred shares of Blank Corporation for \(\$ 21.000\) on January 1 , 20X1. Shepard Company has no preferred shares outstanding. The amount of preferred stock reported in the consolidated balance sheet immediately after the stock purchases is:

a. \(\$ 0\).

b. \(\$ 9,000\).

c. \(\$ 21,000\).

d. \(\$ 30,000\).

Transcribed Image Text:

Assets $150.000 Liabilities Preferred Stock $ 20,000 30,000 Common Stock 40.000 Retained Earnings 60.000 Total Assets $150,000 Total Liabilities and Equities $150.000