Assume, on January 1, 2019, a parent company acquired an 85% interest in its subsidiary. The total fair value of the controlling and noncontrolling interests was $625,000 over the book value of the subsidiary's Stockholders' Equity on the acquisition date. The parent assigned the excess to the following [A] assets: [A] Asset Property, plant, and equipment (PPE), net... Patent... Initial Fair Value Useful Life $300,000 325,000 12 years 10 years $625,000 This acquisition resulted in no recognized goodwill. Assume the subsidiary sells inventory to the parent (upstream) which includes that inventory in products that it ultimately sells to customers outside of the controlled group. You have compiled the following data for the years ending 2021 and 2022: 2022 Transfer price for inventory sale. Cost of goods sold.... Gross profit.... % Inventory remaining. Gross profit deferred... EOY receivable/payable.... 2021 $375,000 $437,500 (275,000) (287,500) $100,000 25% $150,000 35% $ 25,000 $150,000 $ 52,500 $131,250