GOC reported net income of $75 million in fiscal 2016, and a net loss of $10 million in fiscal 2017. Neither company pays dividends. ITI uses the complete equity method to account for its investment in GOC on its own books. The trial balances of ITI and GOC at June 30, 2018, are as follows: Dr (Cr) (in millions) IT GOC Current assets $ 1,160 $ 60 Property, plant and equipment, net 3,000 700 Identifiable intangible assets 5,500 150 Investment in GOC 635 Current liabilities (875) (50) Long-term liabilities (5,625) (525) Common stock, par (110) (20) Additional paid-in capital (2,900) (300 Retained earnings, July 1 (590) 60 Accumulated other comprehensive income, July 1 (80) (20) Treasury stock 40 10 Sales revenue (10,000) (4,500) Equity in net income of GOC (35) Equity in OCI of GOC (5) Cost of goods sold 7,000 4,000 Operating expenses 2,900 440 Other comprehensive income (15) (5) Totals $0 $0Consolidation Working Paper, Three years after acquisition International Technology Inc. (ITI) acquired all of the voting stock of Global Outsourcing Corporation (GOC) on June 30, 2015, for $550 million in cash and stock, plus an earnings contingency payable at the end of the third year with a fair value of $10 million at the date of acquisition. Within the measurement period, the earnings contingency declined to a fair value of zero and the acquisition price was appropriately adjusted. Both companies have a June 30 year-end. At June 30, 2015, GOC's total stockholders' equity was $200 million, as follows (in millions): Common stock, par $ 20 Additional paid-in capital 300 Retained earnings (deficit) (125) Accumulated other comprehensive income 15 Treasury stock (10) Total $200 At the acquisition date, GOC's inventories were undervalued by $25 million, its property, plant and equipment was overvalued by $300 million, its reported patents and trademarks were undervalued by $50 million, and its long-term debt was undervalued by $15 million. GOC also had previously unreported identifiable intangibles: $25 million of advanced technology and $125 million of customer lists. GOC reports its inventory using the LIFO method, and purchases exceed sales every year. The acquisition date remaining lives of its assets and liabilities are as follows: Property, plant and equipment, net 20 years Patents and trademarks 5 years Advanced technology 5 years Customer lists Indefinite Long-term debt 3 years The straight-line method is used for limited life assets. Impairment losses on the customer lists were $10 million in fiscal 2017 and $20 million in fiscal 2018. Goodwill impairment losses were $10 million in fiscal 2016, $15 million in fiscal 2017, and $10 million in fiscal 2018. GOC reported net income of $75 million in fiscal 2016, and a net loss of $10 million in fiscal 2017. Neither company pays dividends. ITI uses the complete equity method to account for its investment in GOC on its own books. The trial balances of ITI and GOC at June 30, 2018, are as follows