pal company purchased 9 000 shares of sal corporation s 50 par 244808

Pal Company purchased 9,000 shares of Sal Corporation’s $50 par common stock at $90 per share on January 1, 2011, when Sal had capital stock of $500,000 and retained earnings of $300,000. During 2011, Sal Corporation had net income of $50,000 but declared no dividends. On January 1, 2012, Sal Corporation sold an additional 5,000 shares of stock at $100 per share. Sal’s net income for 2012 was $70,000, and no dividends were declared.

REQUIRED: Determine each of the following:

1. The balance of Pal Company’s Investment in Sal account on December 31, 2011

2. The goodwill that should appear in the consolidated balance sheet at December 31, 2012, assuming that Pal Company purchased the 5,000 shares issued on January 1, 2012

3. Additional paid-in capital from consolidation at December 31, 2012, assuming that Sal sold the 5,000 shares issued on January 1, 2012, to outside entities

4. Noncontrolling interest at December 31, 2012, assuming that Sal sold the 5,000 shares issued on January 1, 2012, to outsiders

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