On December 31, Year 4. RAV Company purchased 60% ofthe outstanding common shares of ENS Company for $1,380,000. On that date, ENS had common shares of $500,000 and retained earnings of $110,000. In negotiating the purchase price, it was agreed that recorded assets and liabilities were fairly valued except for equipment. which had a $24,000 excess of carrying amount over fair value, and land, which had a $149,000 excess of fair value over carrying amount. The equipment had a remaining useful life of six years at the acquisition date and no salvage value. ENS did not record the fair value deciency on the equipment because ENS felt that it would recover the carrying amount of this equipment through future cash ows. In addition, ENS registered and owns a number of Internet domain names, which are estimated to be worth $99,000. The right to the names expires in 12 years but the registration can be renewed for 20 years every 20 years, for a nominal fee. The adjusted trial balances for RAV and ENS for the year ended December 31, Year 8, were as follows: 414\" ENS Cash $ 195, 000 $ 95, 000 Accounts receivable 197, 000 246, 000 Inventory 634, 000 317, 000 Land 780, 000 370, 000 Building (net) 910, 000 685, 000 Equipment (net) 730, 000 409, 000 Investment in ENS 691, 200 ' Cost of goods purchased 2, 400, 000 2, 437, 000 Change in inventory 100, 000 (50, 000) Amortization expense 200, 000 100, 000 Income taxes and other expenses 900,000 452, 000 Dividends paid 363, 600 244, 000 Total debits $8,100,800 $5,305, 000 Accounts payable $ 485, 000 $ 336, 000 Longcterm debt 220, 600 780, 000 Common shares 1, 200, 000 500, 000 Retained earnings, beginning 574, 800 279, 000 Sales 5, 220, 000 3, 410, 000 Other revenues 113, 000 Equity method income from ENS 28?, 400 Total credits $8,100,800 $5, 305, 000 Additional In forms rion: - Every year, goodwill is evaluated to determine if there has been a loss. The recoverable amount for ENS's goodwill was valued at $99,000 at the end of Year 7 and $75,000 at the end of Year 8. - RAV's inventories contained $300,000 of merchandise purchased from ENS at December 31, Year 8, and $400,000 at December 31, Year 7. During Year 8. sales from ENS to RAV were $690,000. Merchandise was priced at the same profit margin as applicable to other customers. RAV owed $190,000 to ENS at December 31, Year 8, and $198,000 at December 31. Year 7. - On July 1. Year 5. ENS purchased a building from RAV for $790,000. The building had an original cost of $840,000 and a carrying amount of $640,000 on RAV's books on July 1, Year 5. ENS estimated the remaining life of the building was 15 years at the time of the purchase from RAV. - ENS rented another building from RAV throughout the year for $4,000 per month. - RAV uses the equity method of accounting for its longrterm investments. - Both companies pay tax at the rate of 4096. Ignore deferred income taxes when allocating and recording changes to the acquisition differential