LEO Inc. acquired a 60% interest in MARS Inc. on January 1, 2019 for $400,000. Unless otherwise stated, LEO uses the cost method to account for its investment in MARS Inc. On the acquisition date, MARS had common stock and retained earnings valued at $100,000 and $150,000 respectively. The acquisition differential (fair value adjustment) was allocated as follows: - $80,000 to undervalued inventory, - $40,000 to undervalued equipment (to be amortized over 20 years). The following took place during 2019: MARS reported a net income and declared dividends of $25,000 and $5,000 respectively. LEO's December 31, 2019 inventory contained an intercompany profit of $10,000. LEO's net income was $75,000. All intercompany sales as well as sales to outsiders are priced to provide the selling company with gross margin of 20%. What would be the balance in the non-controlling interest account on the date of acquisition under the Entity method? $296,667 $400,000 $118,667 $266,667