Smith, Inc., has the following stockholders' equity accounts as of January 1, 2014 Preferred stock $100 par, nonvoting and nonparticipating, 7 percent cumulative dividend 2,090,000 4,090,000 Common stock $20 par value 10,090,000 Retained earnings Harried Company purchases all of Smith's common stock on January 1, 2014, for $14,240,000. The preferred stock remains in the hands of outside parties. Any excess acquisition-date fair value will be assigned to franchise contracts with a 30-year remaining life During 2014, Smith reports earning $540,000 in net income and declares $450,000 in cash dividends. Haried applies the equity method to this investment