Hound Hollow partners. starts its business raising $800,000 in cash and $200,000 in a bond offering. It immediately purchases 4,000 hogs at $100 per hog, purchases 100 acres of land for $300,000, and builds a barn for $250,000. During the year it makes $200,000 of pre-tax profit using accrual accounting. It booked $25,000 of depreciation. Cash at the end of year 2 was 50,000.

Opening balance Sheet

Assets

Cash $50,000

Land $300,000

Barn $250,000

Livestock $400,000

Total Assets $1,000,000

Liabilities Bond $200.000

Shareholder equity $800,000

At the end of Year 1, The hogs are worth $90 each on the open market. 3.500 hogs are still owned. The land had increased in value by 10% due to favorable market conditions. The replacement cost of the barn remains $250,000. Due to a change in interest rates, the bnd is now worth $180,000. What is the pre-tax profit using the fair value method of accounting? (Show calculations, not just answer.)