Nascent, Inc., acquires 60 percent of Sea-Breeze Corporation for $414,000 cash on January 1, 2009. The remaining 40 percent of the Sea-Breeze shares traded near a total value of $276,000 both before and after the acquisition date. On January 1, 2009, Sea-Breeze had the following assets and liabilities:

The companies€™ financial statements for the year ending December 31, 2012, follow:

Answer the following questions:
a. How can the accountant determine that the parent has applied the initial value method?
b. What is the annual excess amortization initially recognized in connection with this acquisition?
c. If the parent had applied the equity method, what investment income would the parent have recorded in 2012?
d. What is the parent€™s portion of consolidated retained earnings as of January 1, 2012?
e. What is consolidated net income for 2012 and what amounts are attributable to the controlling and noncontrolling interests?
f. Within consolidated statements at January 1, 2009, what balance is included for the subsidiary€™s Buildings account?
g. What is the consolidated Buildings reported balance as of December 31,2012?

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Book Value Fair Value 150,000 150,000 200,000 360,000 280,000 100,000 (400,000 (400,000) Land Buildings (net) (6-year life) ...__... Equipment (net) (4-year life) Patent (10-year life) Liabilities_. 200,000 300,000 300,000 Investment income earnings, 1/1/12 2 Retained earnings, 1 Current assets Equipment (net) 2/B1/12 330,000 100,000 Investment in Sea-Breeze $2,064,000 1,000,000 (500,000) (200,000) Common stock earnings, 1231/12 Total liabilities and equities ..__-. . .. . .. $(2.064.000) S1.000,000)