NAS Company acquires 90% of SUN Company for $450,000 cash on January 1, 2017. SUN reported common stock of $180,000 and retained earnings of $120,000 on that date. Equipment (life 12 years) was undervalued by $16,000. Land was undervalued by $50,000. Building (life 12 years) was undervalued by $60,000. Inventory (fifo) was OVERvalued by $42,000. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill was not impaired at any time during the three years.

Paid by NAS Ownership Total Fair Value NCI share NCI Ownership Purchase price for Corpuz $450,000 $1 $500,000 $50,000 $0 SUN book value at acquisition Fair Value Adjustments $$ Remaining Life Annual Amortization Inventory (42,000) 1 (42,000) Common stock and PIC $180,000 Buildings 60,000 12 5,000 Retained Earnings $120,000 Equipment $ 16,000 12 1,333 Total book value $300,000 Land $ 50,000 84,000 $ (35,667) SUN earn income and pays dividends as follows: 2017 2018 2019 Net Income $200,000 $100,000 $150,000 Dividends $60,000 $80,000 $80,000