1. Following are financial statements for Moore Company and Kirby Company for 2018 Moore S (800,000) S (600,000) Kirbv Sales Cost of goods sold 500,000 400,000 Operating and interest expenses 100,000 160,000 Net income S (200,000) S (40,000) S (990,000) S (550.000) (200,000) 40,000) Retained eamings, 1/1/1S Net income Dividends declared 130,000 Retained carnings, 12/31/18 S(1,060,000) S (590,000) Cash and receivables S 217,000 S 180,000 224,000 657,000 600,000 1,000,000 Inventory 160,000 Investment in Kirby Equipment (net) 420.000 650,000 (200.000) Buildings Accumulated depreciation-buildings (100,000) Other assets 200,000 100,.000 Total assets S 2.798.000 S1,310,000 S(1.138,000) S (570,000) (600,000) (150,000) Liabilities Common stock Retained earnings, 12/31 / 18 (1,060,000) Total liabilities and equity S(2.798,000) S1,310.000) Moore purchased 9o percent of Kirby on January 1, 2017, for $657,00o in cash. Orn that date, the 10 percent noncontrolling interest was assessed to have a $73,o00 fair value. Also at the acquisition date, Kirby held equipment (four-year remaining life) undervalued in its financial records by $20,0oo and interest-bearing liabilities (five- year remaining life) overvalued by $40,000. The rest of the excess fair over book value was assigned to previously unrecognized brand names and amortized over a 10-year life. During 2017 Kirby reported a net income of $80,000 and declared no dividends. Each year Kirby sells Moore inventory at a 20 percent gross profit rate. Intra-entity sales were $145,000 in 2017 and S160,000 in 2018. On January 1, 2018, 30 percent of the 2017 transfers were still on hand, and on December 31, 2018, 40 percent of the 2018 transfers remained. Moore sold Kirby a building on January 2, 2017. It had cost Moore $1o0,000 but had $9o,000 in accumulated depreciation at the time of this transfer. The price was $25,000 in cash. At that time, the building had a five-year remaining life