Thomas Inc Kuried Co Acquired All of the Voting Common Stock of Thomas

question 14

Essay

Thomas Inc. had the following stockholders' equity accounts as of January 1, 2013: $\begin{array}{lr}\text { Preferred stock - } \$ 90 \text { par value, nonvoting and nonparticipating; }\\\text {\( 9 \% \) cumulative dividend }&\$2,700,000\\\text {Common stock - \$25 par value }&5,600,000\\\text {Retained earnings }&14,000,000\\\end{array}$
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.
What was Kuried's balance in the Investment in Thomas Inc. account as of December 31, 2013?

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Definitions:

Stemplots

A graphical representation of data that shows numerical frequencies using stems and leafs to display the distribution of a dataset.

Quantitative Variables

These are variables that represent numerical data which can be quantified or counted, allowing for mathematical operations to be performed on them.

Stemplots

A graphical method of displaying quantitative data, typically used to show the distribution of smaller datasets.

Histograms

Histograms are graphical representations of the distribution of numerical data, where the data is divided into bins or intervals, and the frequency of data points in each bin is depicted by the height of the bar.