On January 1, 2015, John Doe Enterprises (JDE) acquired a 55% interest in Bubba Manufacturing, Inc. (BMI). JDE paid for the transaction with $3 million cash and 500,000 shares of JDE common stock (par value $1.00 per share. At the time of the acquisition, BMIs book value was $16,970,000. On January 1, JDE stock had a market value of $14.90 per share and there was no control premium in this transaction. Any consideration transferred over book value is assigned to goodwill. BMI had the following balances on January 1, 2015. Book Value Fair Value Land $1,700,000 $ 2550,000 Buildings (7 year remaining life) 2,700,000 3,400,000 Equipment (5 year remaining life) 3,700,000 3,300,000 For internal reporting purposes, JDE employed the equity method to account for this investment. The following account balances are for the year ending December 31, 2015 for both companies: John Doe Enterprises Bubba Manufacturing Revenues $(298,000,000) $(103,750,000) Expenses 271,000,000 95,800,000 Equity in income of Bubba Manufacturing (4,361,500) -0- Net Income $(31,361,500) $(7,950,000) Retained Earnings, January 1, 2015 $(2,500,000) $(100,000) Net income (above) (31,361,500) (7,950,000) Dividends paid 5,000,000 3,000,000 Retained earnings, December 31, 2015 $(28,861,500) $(5,050,000) Current assets $30,500,000 $20,800,000 Investment in Bubba Manufacturing 13,161,500 Land 1,500,000 1,700,000 Buildings 5,600,000 2,360,000 Equipment (net) 3,100,000 2,960,000 Total Assets 53,861,500 27,820,000 Accounts payable (3,100,000) (4,900,000) Notes payable (1,000,000) Common Stock (2,900,000) (6,000,000) Additional Paid-in Capital (19,000,000) (10,870,000) Retained earnings, Dec. 31, 2015 (above) (28,861,500) (5,050,000) Total Liabilities and Stockholders Equity $(53,861,500) $(27,820,000)