Thomas Inc. had the following stockholders' equity accounts as of January 1, 2018: Preferred stock - $90 par value, nonvoting and nonparticipating; 9% cumulative dividend$2,700,000 Common stock - $25 par value 5,600,000 Retained earnings 14,000,000 ??Kuried Co. acquired all of the voting common stock of Thomas on January 1, 2018, 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 2018, 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 2018.
What will be an ideal response?
| Consolidation Entry | ||
| Consolidation Entries S and A (combined) | ||
| Common Stock (Thomas Inc.) | 5,600,000 | |
| Preferred Stock (Thomas Inc.) | 2,700,000 | |
| Retained Earnings, 1/1/18 (Thomas Inc.) | 14,000,000 | |
| Database | 656,000 | |
| Goodwill | 760,000 | |
| Investment in Thomas Inc. | 20,656,000 | |
| Noncontrolling Interest in Thomas Inc. | 3,060,000 | |
| Consolidated Entry I | ||
| Equity Income of Subsidiary | 387,000 | |
| Investment in Thomas Inc. | 387,000 | |
| Consolidation Entry D | ||
| Investment in Thomas Inc. | 261,000 | |
| Dividends Paid | 261,000 | |
| Consolidation Entry E | ||
| Amortization Expense | 131,200 | |
| Database | 131,200 | |
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