On January $1,2023,$ Playtel Inc. acquired all of the stock of San Jose Cable for $$450$ million in cash. At the date of acquisition, San Jose$$s shareholders$$ equity accounts were as follows $($in thousands$)$:

Common stock, $$1$ par $$9,000$

Additional paid$-$in capital $54,000$

Retained deficit $(1,800)$

Treasury stock $(900)$

Total $$60,300$

Both companies have a December $31$ year$-$end. At the date of acquisition, San Jose$$s reported net assets had book values approximating fair value. However, it had previously unreported indefinite$-$life identifiable intangibles valued at $$117$ million, meeting ASC Topic $805$ requirements for capitalization. Impairment losses in $2023$ for identifiable intangibles were $$900,000.$ Goodwill from this acquisition was not impaired in $2023.$ San Jose reported net income of $$5\mathrm{.}0$ million in $2023,$ and paid no dividends. Playtel uses the complete equity method to report its investment in San Jose on its own books.

It is now December $31,2024,$ two years since the acquisition. In $2024,$ San Jose reported net income of $$5\mathrm{.}0$ million and declared and paid dividends of $$720,000.$ Impairment losses on the identifiable intangibles were $$1\mathrm{.}8$ million, and goodwill was impaired by $$1,080,000.$

Note: Provide all answers in thousands.

a$.$ Calculate equity in net income of San Jose for $2024,$ reported on Playtel$$s books

$Answer

$2,120$

b$.$ Calculate the December $31,2024,$ investment balance, reported on Playtel$$s books.

$Answer

$0$

c$.$ Prepare eliminating entries $($C$),($E$),($R$),$ and $($O$),$ required to consolidate Playtel$$s trial balance accounts with those of San Jose on December $31,2024.$

Debit Credit

$($C$)$

Equity in net income of San Jose

$2,120$

$0$

Answer

Investment in San Jose

$0$

$2,120$

Answer

$0$

$0$

Answer

To eliminate equity method entries

$($E$)$

Common stock, $$1$ par

$9,000$

$0$

Answer

Additional paid$-$in capital

$54,000$

$0$

Answer

Retained earnings, $1/1$

$0$

$1,800$

Answer

Treasury stock

$0$

$900$

Answer

Investment in San Jose

$0$

$0$

Answer

To eliminate subsidiary's equity account balances

$($R$)$

Identifiable intangibles

$0$

Answer

Goodwill

$0$

$0$

Answer

Investment in San Jose

$0$

Answer

To recognize fair value revaluations

$($O$)$

Impairment losses

$0$

Answer

Identifiable intangibles

$0$

$0$

Answer

Investment in San Jose

$0$

$0$

Answer

To recognize revaluation write$-$offs