On January 1, 2010, People Company acquired an 80% interest in Soft Company for $1,000,000. On that date Soft Company had retained earnings of $200,000 and common stock of $800,000. The book values of assets and liabilities were equal to fair values except for the following: Book Value Fair Value Equipment (net) 320,000 520,000 The equipment had an estimated remaining useful life of 5 years. Soft Company reported net income of $30,000 in 2010 and $40,000 in 2011. Dividends were declared and paid in the amount of $10,000 in 2010 and $15,000 in 2011. People Company uses the cost method to record its investment in Soft Company. Required: For 2010: Prepare the CAD.