Reference no: EM132463954
Problem - Clark, 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
Hampshire Company purchases all of Clark'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, Clark reports earning $580,000 in net income and declares $490,000 in cash dividends. Hampshire applies the equity method to this investment.
Required -
1. What is the noncontrolling interest's share of consolidated net income for this period?
2. What is the balance in the Investment in Clark account as of December 31, 2018?
3. What consolidation entries are needed for 2018?
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