Problem - On January 1, 2011, Riney Co. owned 80% of the common stock of Garvin Co. On that date, Garvin's stockholders' equity accounts had the following balances:
The balance in Riney's Investment in Garvin Co. account was $552,000, and the noncontrolling interest was $138,000. On January 1, 2011, Garvin Co. sold 10,000 shares of previously unissued common stock for $15 per share. Riney did not acquire any of these shares.
1. What is the balance in Investment in Garvin Co. after the sale of the 10,000 shares of common stock?
A. $552,000.
B. $560,000.
C. $460,000.
D. $404,000.
E. $672,000.
2. What is the balance in Noncontrolling Interest in Garvin Co. after the sale of the 10,000 shares of common stock?
A. $138,000.
B. $101,000.
C. $280,000.
D. $230,000.
E. $168,000.
3. Rojas Co. owned 7,000 shares (70%) of the outstanding 10%, $100 par preferred stock and 60% of the outstanding common stock of Brett Co. When Brett reported net income of $780,000, what was the noncontrolling interest in the subsidiary's income?
A. $234,000.
B. $273,000.
C. $302,000.
D. $312,000.
E. $284,000.