Alpha Corporation acquired 75% of Beta Corporations common stock for $20,100,000 on January 2, 2015. The estimated fair value of the noncontrolling interest was $5,900,000. Betas book value at the date of acquisition was $10,000,000, and its identifiable net assets were fairly stated except for previously unreported completed technology, valued at $4,000,000, with a remaining life of 5 years, straight-line. It is now December 31, 2018, and you are preparing consolidated financial statements for Alpha and Beta. Following is information on intercompany transactions:

1. On January 2, 2016, Alpha sold equipment to Beta for $6 million and recorded a gain of $2 million. The equipment had a remaining life of 10 years at that time.
2. Beta supplies Alpha with component parts for its products, at a markup of 20% on cost. During 2018, Beta made sales totaling $20 million to Alpha. Alpha had parts purchased for $1.8 million and $4 million in its 2018 beginning and ending inventory balances, respectively (Hint: $1.8 million is the unsold inventory from last year and $4 is the unsold inventory of this year).
3. Alpha sells materials to Beta for use in its manufacturing processes, with a 20% gross profit ratio. During 2018, Alpha made sales totaling $15 million to Beta. Beta had materials purchased for $3 million and $2.8 million in its 2018 beginning and ending inventory balances, respectively. (Hint: $3 million is the unsold inventory from last year and $2.8 is the unsold inventory of this year).

Goodwill arising from this acquisition was impaired by a total of $3 million during the years 2015-2017, and no further goodwill impairment occurred in 2018. The separate December 31, 2018 trial balances of Alpha and Beta appear below, before Alphas end-year adjustment to record its equity in Betas income for 2018.

Balance Sheet at December 31, 2018
	Alpha	Beta
Cash	1,000	2,500
A/R, net	5,600	10,000
Inventories	70,000	30,000
Plant and Equipment, net	460,000	150,000
Investment in Beta	20,225
Total Assets	556,825	192,500
Current Liabilities	4,000	2,800
Long-term debt	489,825	163,700
Capital Stocks	5,000	2,000
Retained earnings, January 1	90,000	20,000
Dividend	(40,000)	(3,000)
Net Income	8,000	7,000
Total equities	556,825	192,500

Income Statement 2018
	Alpha	Beta
Sales	150,000	50,000
Cost of Sales	(100,000)	(35,000)
Other Expenses	(42,000)	(8,000)
Income from Beta
Net Income	8,000	7,000