Snow Corporation issued common stock with a par value of $100,000 and preferred stock with a par value of $80,000 on January 1, 20X5, when the company was created. Klammer Corporation acquired a controlling interest in Snow on January 1, 20X6.
Required:
What does Klammer's controller need to know about the preferred stock to determine the proper allocation of consolidated net income to the controlling and noncontrolling interests? What ethical factors should be considered, if any?