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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Parson Industries Succo Income Statement Company 404,000 $300,000 Sales Dividend Income Cost of Goods Sold Operating Expenses Income Taxes Net Income 4,000 (200,000) (36,400) (160,000) (50,000) 27,000) 63,000 131,400 Parson Succo Retained Earnings Industries Company 157,400 131,400 1/1 Retained Earnings Net Income Less: Dividends Declared 12/31 Retained Earnings $107,000 63,000 (50,000) 120,000 65,000) Balance Sheet Cash and Receivables InventorieS Land Buildings and Equipment $ 396,800 200,000 300,000 697,000 (100,000) 300,000 1,793,800 $205,000 170,000 120,000 245,000 (70,000) ccumulated Depreciation Investment in Succo Company Totals Current Liabilities Bonds Payable Preferred Stock Common Stock, $10 par value Other Contributed Capital Retained Earnings 670,000 370,000 400,000 600,000 200,000 223,800 1,793,800 $100,000 100,000 100,000 200,000 50,000 120,000 670,000 Totals