Given P06-43: Herman Corporation common stock purchased by Fred, Inc. 60% Cash paid for stock purchase $312,000 Book value of Herman's assets and liabilities $300,000 Fair value of noncontrolling interest $208,000 Herman patents (12-year remaining life) were undervalued by $90,000 Customer list acquisition date fair value $130,000 Life of customer list in years 10 Intra-entity transfers: Original Transfer Ending Cost to Price Balance at Year Herman to Fred Transfer Price 2011 $80,000 $100,000 $20,000 2012 100,000 125,000 40,000 2013 90,000 120,000 30,000 2013 inventory transfers not paid for by Fred at year end 50% Book value of land sold by Fred to Herman $15,000 Sale price of land sold by Fred to Herman $22,000 Face value of Fred's bonds purchased by Herman $20,000 Cash interest rate of bonds purchased by Herman 8% Fred's book value of bond liability at repurchase date $21,386 Effective yield of bonds 6% Herman's bond acquisition price based on effective rate of 10% $18,732 Herman's reported accounts for 2013: Net income $25,000 Beginning retained earnings $300,000 Dividends paid $4,000 Common stock $100,000