On December $31,2024,$ Gummy Inc purchased $80\%$ of the $100,000$ common shares of Wren

L$.$td$.$ for $$1,360,000$

Immediately after the acquisition, Wren's shares were trading at $$15.$ The following is information related to Wren at

acquisition:

Accounts receivable

Inventory

Building $($useful life $10$ years$)$

Common shares

Retained earnings

Fair value

$$60,000$

$135,000$

$600,000$

Below are extracts from the December $31,2026$ separate$-$entity statements of Gummy and Wren.

Net income

Dividends

Retained earnings, closing

Wren

$1,142,000$

Gummy wses the cost method to account for its investment in Wret, and there have not been any intercompary

transactiohs since acquistion. Inventory and accounts teceivable turn over every $60$ days. On December $31,2026,$ it

Was determined that goodwil was impaired by $$10,000$