Sally Corporation's stockholders' equity on December 31, 2014 was as follows:

10% cumulative preferred stock, $100 par value,

callable at $105, with one year dividends in arrears $10,000

Common stock, $1 par value 50,000

Additional paid-in capital 150,000

Retained earnings 160,000

Total stockholders' equity $370,000

On January 1, 2015, Panera Corporation paid $500,000 for a 70% interest in Sally's common stock. On January 1, 2015, the book values of Sally's assets and liabilities were equal to fair values.

Required:

1. Determine the book value of the common stockholders' equity for Sally Corporation on January 1, 2015.

2. What is the amount of goodwill reported on the consolidated balance sheet for Panera Corporation and Subsidiary at January 2, 2015?

3. On January 2, 2015, Panera purchased 70% of Sally's preferred stock for $5,000. Prepare the journal entry(ies) for Panera for this purchase on January 2, 2015.

4. Prepare the elimination entry on the consolidating work papers for the Investment in Sally, Preferred Stock and Sally's Preferred Stock on January 2, 2015.