Photo Corporation acquired 75 percent of Shutter Corporation’s voting common stock on January 1, 20X2, at underlying book value. At the acquisition date, the book values and fair values of Shutter’s assets and liabilities were equal, and the fair value of the noncontrolling interest was equal to 25 percent of the total book value of Shutter. Noncontrolling interest was assigned income of $8,000 in Photo’s consolidated income statement for 20X2 and a balance of $65,500 in Photo’s consolidated balance sheet at December 31, 20X2. Shutter reported retained earnings of $70,000 and additional paid-in capital of $40,000 on January 1, 20X2. Shutter did not pay dividends or issue stock in 20X2.

Required

a. Compute the amount of net income reported by Shutter for 20X2.

b. Prepare the stockholders’ equity section of Shutter’s balance sheet at December 31, 20X2.