Question: Parson Industries purchased 80 of the common stock of Succo
Parson Industries purchased 80% of the common stock of Succo Company on January 1, 2010, for $300,000 when Succo Company’s capital consisted of common stock of $200,000, preferred stock of $100,000, other contributed capital of $50,000, and retained earnings of $62,000. The $100 par value preferred is 15%, cumulative and nonparticipating, and has a call price of $104 per share. Dividends on the preferred stock were not paid in 2009. Trial balances for the parent and subsidiary for the December 31, 2011, year-end are presentedbelow.
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