Sanderson Corporation acquired 70 percent of Kline Corporations common stock on January 1, 20X7, for $294,000 in cash. At the acquisition date, the book values and fair values of Klines assets and liabilities were equal, and the fair value of the noncontrolling interest was equal to 30 percent of the total book value of Kline. The stockholders equity accounts of the two companies at the date of purchase are:
See attached Spreadsheet

a. What amount will be assigned to the noncontrolling interest on January 1, 20X7, in the consoli- dated balance sheet?

b. Prepare the stockholders equity section of Sanderson and Klines consolidated balance sheet as of January 1, 20X7.

c. Sanderson acquired ownership of Kline to ensure a constant supply of electronic switches, which it purchases regularly from Kline. Why might Sanderson not feel compelled to purchase all of Klines shares?