Worksheet, preferred stock, intercompany fixed assets and merchandise, sale of interest. On January 1, 2017, Black Jack Corporation purchases all of the preferred stock and 60% of the common stock of...

Worksheet, preferred stock, intercompany fixed assets and merchandise, sale of interest. On January 1, 2017, Black Jack Corporation purchases all of the preferred stock and 60% of the common stock of Zeppo Company for $56,000 and $111,000, respectively. Immediately prior to the purchases, Zeppo Company has the following stockholders’ equity:

Additional information is as follows:

a. Any excess of cost over book value on the investment in common stock is attributed to equipment with an 8-year life.

b. On December 30, 2017, and December 30, 2018, Zeppo Company pays preferred stock dividends of $8 per share.