Question
Smith, Inc., has the following stockholders equity accounts as of January 1, 2018: Preferred stock$150 par, nonvoting and nonparticipating, 7% cumulative dividend $ 2,130,000 Common
Smith, Inc., has the following stockholders equity accounts as of January 1, 2018:
Preferred stock$150 par, nonvoting and nonparticipating, 7% cumulative dividend | $ | 2,130,000 |
Common stock$25 par value | 4,130,000 | |
Retained earnings | 10,130,000 | |
Haried Company purchases all of Smith's common stock on January 1, 2018, for $14,320,000. 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 2018, Smith reports earning $580,000 in net income and declares $490,000 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, 2018?
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What consolidation entries are needed for 2018?
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