Thomas Inc $\$ 90$ Par Value, Nonvoting and Nonparticipating; Kuried Co Acquired All of the Voting Common Stock of Thomas

question 22

Essay

Thomas Inc. had the following stockholders' equity accounts as of January 1, 2011:
Answer: Preferred stock — $\$ 90$ par value, nonvoting and nonparticipating;
$\begin{array}{lr}9 \% \text { cumulative dividend } & \$ 2,700,000 \\\text { Common stock - } \$ 25 \text { par value } & 5,600,000 \\\text { Retained earnings } & 14,000,000\end{array}$ Kuried Co. acquired all of the voting common stock of Thomas on January 1, 2011, 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 2011, 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 is the controlling interest share of Thomas' net income for the year ended December 31, 2011?

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