Exercise 5-12 (Algo) Consolidation Following Three Years of Ownership LO 5-1, 5-2 Purchase Corporation purchased 60 percent of Steal Company ownership on January 1,207, for $286,500. Steal reported the following net income and dividend payments: On January 1,207, Steal had $259,000 of $6 par value common stock outstanding and retained earnings of $159,000, and the fair value of the noncontrolling interest was $191,000. Steal held land with a book value of $25,500 and a market value of $33,000 and equipment with a book value of $337,000 and a market value of $377,000 at the date of combination. The remainder of the differential at acquisition was attributable to an increase in the value of patents, which had a remaining useful life of 10 years. All depreciable assets held by Steal at the date of acquisition had a remaining economic life of eight years. Required: a. Compute the increase in the fair value of patents held by Steal. b. Prepare the consolidation entries needed at January 1, 20X7, to prepare a consolidated balance sheet. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field