On January 1, 2019, Parent Company acquired 80% Sub Companys voting stock for $75,000 in cash. Subs book value at January 1, 2019 was $6,000. The fair value of the NCI at the time of acquisition was $4,000. Some of Subs identifiable assets at the date of purchase had fair values that were different from reported values, as follows:

	Fair Value minus Book Value
Property & equipment, net (10 years, straight-line)	$(20,000)
Identifiable intangibles (5 years, straight-line)	25,000

It is now December 31, 2020 (2 years later). There has been no goodwill impairment. Sub sells merchandise to Parent at a markup of 25% on cost. Parents beginning inventory for 2020 contains $1,000 in merchandise purchased from Sub. Parents ending inventory contains $750 in merchandise purchased from Sub. Total 2020 retail sales from Parent to Sub were $25,000. Parent owes sub $10,000 for inventory purchases at the end of 2020. On Jan 1, 2019 Parent sold a pickup truck to the sub for $20,000. At the time of the sale the truck had a book value of $10,000. The remaining useful life of the truck is 5 years. Parent uses the complete equity method to account for its investment.

All inventory is accounted for on the FIFO basis.

December 31, 2020 trial balances for Parent and Sub

		Post Acquisition Bal Sheet
		P	S		DR	CR		Consol
	Cash	$ 50,000	$ 60,000					$ 110,000
	Accounts Receivable	$ 80,000	$ 30,000					$ 110,000
	Inventory	$ 225,000	$ 75,000					$ 300,000
	PPE	$ 300,000	$ 50,000					$ 350,000
	Inv in S	$ 116,080						$ 116,080
	Goodwill							$ -
	Brand Names							$ -
	Total Assets	$ 771,080	$ 215,000					$ 986,080
	Liabilities	$ 200,000	$ 144,000					$ 344,000
	NCI							$ -
	Retained Earnings	$ 31,440	$ 40,000					$ 71,440
	Current Year Earnings	$ 64,640	$ 25,000					$ 89,640
	CS	$ 475,000	$ 6,000					$ 481,000
	Total Liabilities & Equity	$ 771,080	$ 215,000					$ 986,080
	Revenue	$ 300,000	$ 100,000					$ 400,000
	Equity In Income	$ 19,640						$ 19,640
	Gain on Sale of Assets							$ -
	Cost of Goods Sold	$ 225,000	$ 55,000					$ 280,000
	Amortization Expense	$ 20,000						$ 20,000
	Depreciation Expense	$ 10,000	$ 20,000					$ 30,000
	Other Expenses							$ -
	Non Controlling Intrerest in Net Income
	Net Income	$ 64,640	$ 25,000		$ -	$ -