Inc., acquired 100 percent of Lydia Company's com On January 1, Prine stock for a fair value of $135,847,000 in cash and stock. Lydia's assets and liabilities equaled their fair values except for its equipment, which was undervalued by $590,000 and had a 10-year remaining life. Prine specializes in media distribution and viewed its acquisition of Lydia as a strategic move into content ownership and creation. Prine expected both cost and revenue synergies from controlling Lydia's artistic content (a large library of classic movies) and its sports programming specialty video operation. Accordingly, Prine allocated Lydia's assets and liabilities (including $64,471,000 of goodwill) to a newly formed operating segment appropriately designated as a reporting unit. The fair values of the reporting unit's identifiable assets and liabilities through the first year of operations were as follows Fair Values Account 12/31 Cash 287,000 100,500 547,000 Receivables (net) 1,117,500 41,700,000 68,680,000 Movie library (25-year life) Broadcast licenses (indefinite life 15,450,000 28,880,000 20,830,000 Equipment (10-year life) 19,240,000 (890,000) Current liabilities 18,000) Long-term debt (6,920,000) (6,710,000) However, Lydia's assets have taken longer than anticipated to produce the expected synergies with Prine's operations. Accordingly, Prine reviewed events and circumstances and concluded that Lydia's fair value was likely less than its carrying amount. At year-end, Prine reduced its assessment of the Lydia reporting unit's fair value to $127,898,000. At December 31, Prine and Lydia submitted the following balances for consolidation. There were no intra- entity payables on that date