Pooley Corporation owns 75 percent of the common shares and 60 percent of the preferred shares of Stanley Company, all acquired at underlying book value on January 1, 20X8. At that date, the fair value of the noncontrolling interest in Stanley's common stock was equal to 25 percent of the book value of its common stock. The balance sheets of Pooley and Stanley immediately after the acquisition contained these balances: PooleyCorporationStanleyCompanyCash and Receivables $80,000 $40,000 Inventory 90,000 60,000 Buildings and Equipment (net) 250,000 200,000 Investment in Stanley Preferred Stock 60,000 Investment in Stanley Common Stock 120,000 Total Assets $600,000 $300,000 Liabilities $150,000 $40,000 Preferred
Stock 100,000 Common Stock 200,000 100,000 Retained Earnings 250,000 60,000 Total Liabilities and Equity $600,000 $300,000 Stanley's preferred stock pays a 12 percent dividend and is cumulative. For 20X8, Stanley reports net income of $40,000 and pays no dividends. Pooley reports income from its separate operations of $75,000 and pays dividends of $30,000 during 20X8.Based on the preceding information, what amount of income is attributable to the controlling interest in the consolidated income statement for 20X8?
A. $105,000
B. $96,000
C. $103,200
D. $75,000
Answer: C
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