5 - 12 On January 2, Year 5, Flood LIN . acquired FOR's of the outstanding voting shares Of Runner LED . THE acquisition differential of $ 520, 000 on that date was allocated in the following manner ." Inventory" $ 160, OOD Lund 110, 000 Plant and equipment* 120, 000 Estimated life 5 Years Patent 40, 000 Estimated life & Years Goodwill $ 520, 000 The Year & income statements for the two companies were as follows : Road $ 4, 500, 0010 $ 2, 160, OOD Inter Company investment income 205, 500 Rental REVENUE 190, 0 0 0 Total income $, $:05 , 500 2. 350, 000 Materials used in manufacturing 2, 300, 000 Changes in work - in - progress and finished `God's inventory 105, 000 | 10, 000!) Employee benefits $10, 000 Interest EXPENSE* $10, 000 DEPRECIation" - 5 5, OOD 275, 00 0 Patent amortization 55, 0 0 0 RONtal LYPEREZ 95, 000 INCOME tax` 350, 000 191, 200 Total EXPENSES 4 , 205, 000 _2, 1 1 1 , 200 Profit 5 561, 50 0* $ 238 , 8:00 Additional Information Funner regularly Sells raw materials to Flood . Intercompany Sales in Year S totaled $ 4 60, 000. Intercompany profits in the inventories of Road were as follows :"