Assignment 3: Advanced Accounting Bassam Company acquired a 80 percent interest in Sam Corporation's outstanding common stock on January 1, 2018, for $512,000 cash. The stockholders' equity of Sam on this date consisted of $450,000 capital stock and $100,000 retained earnings. The differences between the fair value of Sam and the book value of Sam were assigned $66,000 to Sam's overvalued inventory, $50,000 to overvalued buildings, $42,000 to undervalued equipment, and $60,000 to previously unrecorded patents. Any remaining excess is goodwill. The overvalued inventory items were sold during 2018, and the undervalued buildings and equipment had remaining useful lives of ten years and six years, respectively. The patents have a 20-year life. Depreciation is straight line. At December 31, 2018 Sam's accounts payable include $30,000 owed to Bassam Company. Sam Company announced and paid $150,000 of dividends during year 2018. Separate financial statements for Bassam and Sami for 2018 are summarized as follows: Separate Income Statements for year 2018 Bassam Sam Sales $1,100,000 $800,000 Cost of Goods (670,000) (420,000) Sold Depreciation (130,000) (80,000) Expense Other Expenses (50,000) (50,000) Income from Sam ? Net Income ? 250,000