1 23 . 00 () 1 Pay corporation purchased 60 percent of set corporation outstanding preferred stock for 6,500,000 and 70 percent of outstanding common stock for 3500,000 on January 1, 2012 Sets stockholders equity on December 31, 2011, consisted of 10% cumulative 100$ par preferred stock, callable at 105 (100,000 shares issued and outstanding with one year's dividends in arrears). The excess book value of preferred stock over cost equal 500,000 aa @ 900,000 .be 350,000 0 400,000 0 0 2 The retained earnings that appear on the consolidated balance sheet of parent company and its 90 percent - owned subsidiary cows but