On January $1,2023,$ Ridge Road Company acquired $20$ percent of the voting shares of Sauk Trail, Incorporated, for $$2,700,000$ in cash. Both companies provide commercial Internet support services but serve markets in different industries. Ridge Road made the investment to gain access to Sauk Trail$$s board of directors and thus facilitate future cooperative agreements between the two firms. Ridge Road quickly obtained several seats on Sauk Trail$$s board, which gave it the ability to significantly influence Sauk Trail$$s operating and investing activities.

The January $1,2023,$ carrying amounts and corresponding fair values for Sauk Trail$$s assets and liabilities follow:

Assets and Liabilities Carrying Amount Fair Value

Cash and Receivables $ $110,000$ $ $110,000$

Computing Equipment $5,000,0005,700,000$

Patented Technology $100,0004,000,000$

Trademark $150,0002,000,000$

Liabilities $(185,000)(185,000)$

Also, as of January $1,2023,$ Sauk Trail$$s computing equipment had a seven$-$year remaining estimated useful life. The patented technology was estimated to have a three$-$year remaining useful life. The trademark$$s useful life was considered indefinite. Ridge Road attributed to goodwill any unidentified excess cost.

During the next two years, Sauk Trail reported the following net income and dividends:

Years Net Income Dividends Declared

$2023$ $ $1,800,000$ $ $150,000$

$20241,985,000160,000$

Required:

How much of Ridge Road$$s $$2,700,000$ payment for Sauk Trail is attributable to goodwill?

What amount should Ridge Road report for its equity in Sauk Trail$$s earnings on its income statements for $2023$ and $2024?$

What amount should Ridge Road report for its investment in Sauk Trail on its balance sheets at the end of $2023$ and $2024?$