Preferred stock remained in the hands of outside parties

Assignment Help Financial Accounting

Reference no: EM13752141

Thomas Inc. had the following stockholders' equity accounts as of January 1, 2013:

Preferred stock-- $90 par nonvoting nonparticipating;

9% cumulative dividend $2,700,000

Common Stock -- $25 Par $5,600,000

Retained Earnings $14,000,000

Kuried Co. acquired all of the voting common stock of Thomas on January 1, 2013, for $20,656,000. The preferred stock remained in the hands of outside parties and had a fair value of $3,060,000. A database valued at $656,000 was recognized and amortized over five years.

During 2013, Thomas reported earning $630,000 in net income and paid $504,000 in total cash dividends. Kuried used the equity method to account for this investment.

Prepare all consolidation entries for 2013.

Reference no: EM13752141

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