Question
Smith, Inc., has the following stockholders equity accounts as of January 1, 2021: Preferred stock$100 par, nonvoting and nonparticipating, 8% cumulative dividend $ 2,160,000 Common
Smith, Inc., has the following stockholders equity accounts as of January 1, 2021:
Preferred stock$100 par, nonvoting and nonparticipating, 8% cumulative dividend | $ | 2,160,000 |
Common stock$10 par value | 4,160,000 | |
Retained earnings | 10,160,000 | |
Haried Company purchases all of Smith's common stock on January 1, 2021, for $14,360,000. The preferred stock remains in the hands of outside parties. Any excess acquisition-date fair value will be assigned to franchise contracts with a 40-year remaining life.
During 2021, Smith reports earning $610,000 in net income and declares $520,000 in cash dividends. Haried applies the equity method to this investment.
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What is the noncontrolling interest's share of consolidated net income for this period?
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What is the balance in the Investment in Smith account as of December 31, 2021?
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What consolidation entries are needed for 2021?
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