*Problem 7-6 Pitts Company owns 80% of the common stock of Shannon Company. The stock was purchased for $956,000 on January 1, 2012, when Shannon Company's retained earnings were $674,300. On January 1, 2014, Shannon Company sold fixed assets to Pitts Company for $964,700; Shannon Company had purchased these assets for $1,346,000 on January 1, 2004, at which time their estimated useful life was 25 years. The estimated remaining useful life to Pitts Company on 1/1/14 is 10 years. Both companies employ the straight-line method of depreciation. The financial data for 2015 are presented here: Pitts Company Shannon Company Sales Dividend Income Total Revenue $1,955,300 60,000 $1,344,400 2,015,300 1,344,400 Cost of Goods Sold 1,358,100 Other Expenses 226,400 908,100 150,100 Total Cost and Expense 1,584,500 1,058,200 Net Income $430,800 $286,200 1/1 Retained Earnings $1,212,300 $1,048,000 Net Income Dividends Declared 430,800 (150,200) 286,200 (75,000) 12/31 Retained Earnings Inventory $1,492,900 $1,259,200 $493,700 $225,600 Investment in Shannon Company 956,000 Fixed Assets 2,164,300 2,635,300 Accumulated Depreciation-Fixed Assets (905,300) (616,900) Total Assets $2,708,700 $2,244,000 Liabilities $452,900 Common Stock 762,900 Retained Earnings 1,492,900 Total Liabilities and Equity $2,708,700 $464,100 520,700 1,259,200 $2,244,000 Net Income to Retained Earnings Statement of Retained Earnings Retained Earnings 1/1 Net Income/Loss T Dividends Declared 430800 286200 60000 15710 60382 612328 1212300 T1048000 430800 T150200) 286200 75000) 60000 15710 60000 K15000) 60382 612328 (150200) Retained Earnings 12/31 | 1492900 1259200 45382 Balance Sheet Assets Inventory Investment in Shannon Company Fixed Assets Accumulated Depreciation 493700 25600 1956000 [298960 1254960 2164300 2635300 381300 1905300 616900 31420 | Total Assets 2708700 P2244000 Liabilities Common Stock Retained Earnings from above 452900 464100 762900 1520700 1520700 1492900 1259200 1/1 Noncontrolling Interest 12/31 Noncontrolling Interest 31420 Total Liabilities and Stockholders' Equity */bl $2708700 $2244000 719300 5180900 1538400 (2029180) 3871020 917000 762900 45382 Attempts: 2 of 4 used