Quill Corporation purchased 70 percent of the stock of North Company on January 1, 20X9, for \(\$ 105,000\). The following stockholders' equity balances were reported by the companies immediately after the acquisition:

Quill and North reported 20X9 operating incomes of \(\$ 90,000\) and \(\$ 35,000\) and dividend payments of \(\$ 30,000\) and \(\$ 10,000\), respectively.
\section*{Required}

a. Compute the amount reported as net income by each company for \(20 \mathrm{X} 9\), assuming Quill uses equity-method accounting for its investment in North.

b. Compute consolidated net income for 20X9.

c. Compute the reported balance in retained earnings at December \(31,20 \mathrm{X} 9\), for both companies.

d. Compute consolidated retained earnings at December 31, 20X9.

e. How would the computation of consolidated retained earnings at December \(31,20 \mathrm{X} 9\), change if Quill uses the cost method in accounting for its investment in North Company?

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Quill Corporation Common Stock $120,000 Additional Paid-In Capital 230.000 Retained Earnings 290,000 North Company $ 30,000 80,000 40.000 Total $640,000 $150,000