Chegg Study TEXTBOOK SOLUTIONS EXPERT O&A Search home /study /business / accounting/accounting questions and answers/ padre, inc, buys 80 percent of the outstanding common stock of siera c. Question: Padre, Inc., buys 80 percent of the outstanding common stock Padre, Inc, buys 80 percent of the outstanding common stock of Sierra Corporation on January 1,2018, for S826,240 cash. At the acquisition date, Sierra's total fair value, including the noncontrolling interest, was assessed at $1,032800 although Sierra's book value was only $645,000. Also, several individual tems on Sierra's financial records had fair values that differed from their book values as follows Book Value Land Buildings and equipment (10-year remaining life Copynight (20-year remaining life) Notes payable Idue in 8 years) Fair Value s327,400 340,000 280,000 (183.200 SI 66,400 360,000 146,000 (196,000 For internal reporting purposes, Padre, Inc, employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2018, for both companies Revenues 675,90o 424,000 8,600 7300 9,000 S(1.534 940 ost of goods sold Depreciation expense Amortization expense 354,000 53.500 Acco can Equity ih income of Siema