May 1, 2015, Peters Company purchased 80% of the common stock of Smith Company for $45,400. Additional data concerning these two companies for the years 2015 and 2016 are 2015 2016 Peters SmithPeters Smith Common stock $94,800 $19,100 $94,800 $19,100 Other contributed capital 41,200 10,900 41,200 10,900 Retained earnings, 1/1 86,500 10,800 137,800 53,000 Net income (loss) 65,900 44,400 40,500 (4,600) Cash dividends (11/30) 14,600 2,200 5,100 Any difference between book value and the value implied by the purchase price relates to Smith Company's land. Peters Company uses the cost method to record its investment.
