P 8-6 Midyear purchase of additional interest, preaequisition income Pot Corporation purchased a 70 percent interest in Sod Corporation on January 2, 201 1, for $98,000, when Sod had capital stock of $100,000 and retained earnings of $20,000. On June 30, 2012, Pot pur- chased an additional 20 percent interest for $37,011). Comparative nancial statements for Pot and Sod Corporations at and for the year ended December 31, 2012, are as follows (in thousands): Pot Sod Combined Income and Retained Earnings Statementfor the Year Ended December 31 Sales $400 $200 Income from Sod 24 Cost of sales (250) (150) Expenses E} E) Net income 124 30 Add: Beginning retained earnings 200 50 Less: Dividends, December 1 _E) _10) Retained earnings, December 31 m Balance Sheet at December 31 Other assets $429 $200 Investment in Sod 1?] Total assets E @ Liabilities 540 W Common stock 300 100 Retained earnings 260 1'0 Total equities E m H E U U I R E D 1. Prepare a schedule explaining the $171,000 balance in Pot's Investment in Sod account at December 31, 2012. 2. Compute goodwill that will appear in the December 31, 2012, consolidated balance sheet. 3. Prepare a schedule computing consolidated net income for 2012. 4. Compute consolidated retained earnings on December 31, 2012. 5. Compute noncontrolling interest on December 31, 2012