Probabilistic Corporation acquired 95 percent of Statistics Company's common stock on January 1, year x10, for $2,100,000.All (except for $100,000) of the purchase differential is attributable to a unique patent held by S.On December 31, year x9, the stockholders' equity sections of the balance sheets for the two companies were as follows:

PS

Common stock$1800k$800k

APIC800k400k

Retained earnings1100k600k

Total$3700k$1800k

Results of operations for year x10 were as follows:

PS

Net income$200k

Separate income$500k

Dividends declared$60k$40k

All amortizable intangibles have remaining economic lives of 10 years.

The 9 questions are:

based on the information given above,

1. what will be the balance in the investment account on December 31, x10, just prior to the preparation of consolidated financial statements?

2. what is P's share of consolidated net income for x10? [Hint: same as P's Net Income since there was no GW Impairment Loss.]

3. what amount will be reported as dividends declared in the x10 consolidated retained earnings statement?

4. what amount will be reported in the December 31, x10, consolidated balance sheet as common stock outstanding?

5. what amount will be reported as consolidated retained earnings in the December 31, x10, consolidated balance sheet?

6. what amount would P report as retained earnings prior to consolidating S on December 31, x10, assuming P uses the equity method to account for the Investment in S?

7. what amount of investment income (III) will P recognize on P's books for year x10 if it uses the equity method in accounting for its subsidiary investment?

8. based on the information given above, what will be the balance in the investment in subsidiary account reported on the December 31, x10, consolidated balance sheet? [Hint: this is really an easy one.]

9. based on the information given above, and using the algebraic method, what amount of goodwill will be reported in the December 31, x12, consolidated balance sheet?