Smith, Inc., has the following stockholders’ equity accounts as of January 1, 2011:

Haried Company purchases all of Smith’s common stock on January 1, 2011, for \($14,040,000\). 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 life.
During 2011, Smith reports earning \($450,000\) in net income and pays \($360,000\) in cash dividends.
Haried applies the equity method to this investment.

a. What is the noncontrolling interest’s share of consolidated net income for this period?

b. What is the balance in the Investment in Smith account as of December 31, 2011?

c. What consolidation entries are needed for 2011?

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Preferred stock-$100 par, nonvoting and nonparticipating, 8 percent cumulative dividend Common stock-$20 par value Retained earnings. $2,000,000 4,000,000 10,000,000