On $\frac{1}{1}\frac{?}{24},$ P Corporation purchased $60\%$ of S Corporation for $$900,000.$ At that time, S Corp

had common stock of $$750,000$ and retained earnings of $$350,000.$ An analysis of S Corp

indicated that inventory had a book value of $$100,000$ and a FMV of $$120,000$ and equipment

with a book value of $$50,000$ had a FMV of $$10,000.$ Fifty percent of the inventory remained in

ending inventory a $\frac{12}{31}\frac{?}{24}.$ The equipment had a $10-$year life when purchased and has $4$

remaining years of useful life. The equipment is being depreciated using the straight$-$line

method. Additionally, P Corp discovered an unrecorded patent with a remaining $5-$year life and

a FMV of $20,000.$

Financial Statements for P Corp and S Corp at $12/31/24$ are presented below:

Statement of Retained Earnings

$\frac{1}{1}$ Retained Earnings

Phelps Company

Sloane Company

Net Income

Dividends Declared

Phelps Company

Sloane Company

$12/31$ Retained Earnings