Exercise A 8 - 2: 2 - years post, AAP, 10%6 = 100%6, Equity method Pole Company acquired 100 percent of the capital stock of Sitter , Inc ., on January 1 , 20'X'1 , in exchange for $80, 000 . Assume the transaction was taxable and goodwill , if recorded , was nondeductible for tax purposes . On this date . Sitter's stockholders' Equity consisted of capital stock , $50 , 000 , and retained Earnings , $12, 000 . On the acquisition date , Sitter's identifiable net assets had appraised FASE ASC $05 fair values Equal to the recorded values on Sitter's books , except for property and equipment which had a fair value of $30 , 000 and a depreciated net carrying value of $ 20,000 . The equipment had a remaining useful life of four years . Two years later ( at December 31 , 20X 2 ) , the trial balances of the companies are* as presented on the next page