On January 1, 2021, Pomegranate Company acquired 90% of the voting stock of Starfruit Company for $91,700,000 in cash. The fair value of the noncontrolling interest in Starfruit at the date of acquisition was $6,300,000. Starfruits book value was $13,000,000 at the date of acquisition. Starfruits assets and liabilities were reported on its books at values approximating fair value, except its plant and equipment (10-year life, straight-line) was overvalued by $25,000,000. Starfruit Company had previously unreported intangible assets, with a market value of $40,000,000 and 5-year life, straight-line, which were capitalized following GAAP.

Additional information

Pomegranate uses the complete equity method to account for its investment in Starfruit on its own books. Goodwill recognized in this acquisition was impaired by a total of $2,000,000 in 2021 and 2022, and by $500,000 in 2023. It is now December 31, 2023, the accounting year-end. Here is Starfruit Companys trial balance at December 31, 2023:

	Dr (Cr)
Current assets	$28,200,000
Plant & equipment, net	188,000,000
Intangibles	2,000,000
Liabilities	(180,000,000)
Capital stock	(1,000,000)
Retained earnings, January 1	(29,500,000)
Acumulated other comprehensive income, January 1	(500,000)
Dividends	400,000
Sales revenue	(24,000,000)
Cost of goods sold	10,000,000
Operating expenses	6,500,000
Other comprehensive income	(100,000)
	$ 0

1 On the 2023 consolidated income statement, the noncontrolling interest in net income of Starfruit is

$150,000

$175,000

$200,000

$750,000

2 On the 2023 consolidation working paper, eliminating entry (R) reduces the Investment in Starfruit by

$ 3,600,000

$64,800,000

$68,200,000

$81,000,000