Punch Manufacturing Corporation owns 80 percent of the common shares of Short Retail Stores. The companies' balance sheets as of December 31, 20X4, were as follows: Assets Cash Accounts Receivable Inventory Land Buildings and Equipment Less: Accumulated Depreciation Investment in Short Retail Stores Total Assets Liabilities and Equity Accounts Payable Bonds Payable Preferred Stock ($10 par value) Common Stock: $10 par value $5 par value Retained Earnings Total Liabilities and Equity Punch Manufacturing Corporation $ 52,000 101,000 270,000 95,000 510,000 ( 240,000 ) 124,000 $ 912,000 $ 62,000 300,000 200,000 150,000 200,000 912,000 Short Retail Stores $ 32,000 81,000 130,000 65,000 340,000 (125,000) $ 523,000 $ 68,000 200,000 100,000 100,000 55,000 $ 523,000 Short Retail's 8 percent preferred stock is convertible into 15,000 shares of common stock, and its 10 percent bonds are convertible into 8,000 shares of common stock. Short reported net income of $52,200 for 20X4 and paid dividends of $30,700. Punch Manufacturing has 11 percent preferred stock and 12 percent bonds outstanding, neither of which is convertible. Punch reported after-tax income, excluding investment income from Short, of $130,000 in 20X4 and paid dividends of $64,000. The companies file separate tax returns and are subject to a 40 percent income tax.