House Corporation has been operating profitably since its creation in 1960. At the beginning of 2019, House acquired a 70 percent ownership in Wilson Company. At the acquisition date, House prepared the following fair-value allocation schedule: Consideration transferred for 70% interest in Wilson Fair value of the 30% noncontrolling interest Wilson business fair value Wilson book value Excess fair value over book value 770,000 330,000 $1,100,000 751,000 349,000 Assignments to adjust Wilson's assets to fair value: To buildings (20-year remaining life) To equipment (4-year remaining life) To franchises (10-year remaining life) To goodwill (indefinite life) $ 86,000 (31,200) 55,500 110,300 $ 238,700 House regularly buys inventory from Wilson at a markup of 25 percent more than cost. House's purchases during 2019 and 2020 and related ending inventory balances follow: Year 2019 2020 Intra-Entity Purchases $131,250 159,375 Remaining Intra-Entity Inventory- End of Year (at transfer price) $43,750 63,750 On January 1, 2021, House and Wilson acted together as co-acquirers of 80 percent of Cuddy Company's outstanding common stock. The total price of these shares was $260,800, indicating neither goodwill nor other specific fair-value allocations. Each company put up one-half of the consideration transferred. During 2021, House acquired additional inventory from Wilson at a price of $233,000. Of this merchandise, 45 percent is still held at year-end. Following are the financial records for the three companies for 2021. Sales and other revenues Cost of goods sold Operating expenses Income of Wilson Company Income of Cuddy Company Net income Retained earnings, 1/1/21 Net income (above) Dividends declared Retained earnings, 12/31/21 Cash and receivables Inventory Investment in Wilson Company Investment in Cuddy Company Buildings Equipment Land House Corporation Wilson Company Cuddy Company $ (976,608) $ (859,860) $ (401,700) 597,000 221,000 (136,752) (29,640) 370,000 294,500 0 (29,640) 228,000 99,600 $ (325,000) $ (225,000) (74,100) $ (884,000) $ (628,000) $ (176,000) (325,000) 100,000 (225,000) 96,000 (74,100) 50,000 $ (1,109,000) $ (757,000) $ (200,100) 79,458 $ 405,050 264,960 338,000 $ 82,250 78,350 970,452 0 140,040 140,040 8 453,000 389,000 221,000 326,000 204,000 90,200 256,000 351,000 107 0 18,300 400 100