Consolidation Working Paper, Noncontrolling Interest, Intercompany Merchandise Transactions Kellogg Company (Kellogg's) acquired 75 percent of the outstanding stock of Wholesome & Hearty Foods ("Wholesome") at the end of 2011, for cash and stock totaling $120 million. Wholesome's assets and liabilities were fairly reported at the date of acquisition, except for these items: (in thousands) Plant & Equipment, net (10-year life, straight-line) Veggie Burger recipe (10-year life, straight-line) Long-term debt (4-year life, straight-line) Book Value Fair Value $150,000 0 30,000 $135,000 25,000 34,000 Wholesome's book value at the date of acquisition was $74 million, and the fair value of the 25% noncontrolling interest was $35 million. It is now December 31, 2020 (the end of the ninth year since acquisition). Impairment testing on the goodwill arising in this acquisition reveals that total impairment during 2012-2019 is $2 million, and impairment in 2020 is $1 million. Wholesome sells merchandise and raw materials to Kellogg's at a markup of 30% on cost. Here is information on these intercompany sales (in thousands): Inventory, January 1, 2020, reported on Kellogg's books Inventory, December 31, 2020, reported on Kellogg's books Transfer price for 2020 sales from Wholesome to Kellogg's $10,400 13,000 60,000 Below are the separate trial balances of Kellogg's and Wholesome at December 31, 2020. Dr(Cr) (in thousands) Kellogg's Wholesome Current assets $35,000 $20,000 Plant and equipment, net 262,650 192,000 Investment in Wholesome 128,850 Identifiable intangibles 100,000 10,000 Current liabilities (30,000) (25,000) Long-term debt (350.000) (100.000)