Reference no: EM132488612
Smith, Inc., has the following stockholders' equity accounts as of January 1, 2018:
Preferred stock - $100 par, nonvoting and non participating, 6% cumulative dividend: $2,250,000
Common stock - $20 par value: $4,250,000
Retained Earnings: $10,250,000
Point 1: Haried Company purchases all of Smith's common stock on January 1, 2018, for $14,550,000. 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.
Point 2: During 2018, Smith reports earning $700,000 in net income and declares $610,000 in cash dividends. Haried applies the equity method to this investment.
Question 1: What is the noncontrolling interest's share of consolidated net income for this period?
Question 2: What is the balance in the Investment in Smith account as of December 31, 2018?
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