On January 1, Year 1, Par Ltd. purchased 85% of the outstanding common shares of Son Company for $93,500 in cash. On the date of the purchase, Son had common shares of $43,000 and retained earnings of $27,000. Son has a new patent that is not recorded in its books but has a fair value of $10,000. The patent rights extend for another 4 years. The carrying amounts of Son's assets and liabilities were equal to their fair value except for the following items: Cm'ng value Inventory 40,000 Equipment 61,000 Bond payable 42,000 Fair value 44,000 55,000 46,000 The equipment in Son's books has an expected remaining useful life of 10 years and the bond payable matures December 31 Year 4. Due to economic changes the annual goodwill impairment tests resulted in a $2,000 loss in Year 2 and $3,000 loss in Year 3. At December 31, Year 3, Son owed Par $8,000 in an interest bearing note at 2.5%. During Year 3, Par paid $20,000 in dividends and Son paid $10,000 in dividends. The income statements and balance sheets for both companies for the year ended Year 3 are as follows: Balance Sheets At December 31, Year 3 Par Ltd. Assets Cash $ 32,000 Accounts receivable 100,000 Notes receivable 89,000 Inventory 90,000 Land 65,500 Equipment 570,000 Accumulated depreciation 70,000 Investment in Son (cost basis) 93,500 M Liabilities & Shareholders\" equity Accounts payable $ 80,000 Notes payable 10,000 Bonds payable 180,000 Common shares 480,000 Retained earnings 220,000 970,000 Son Company $ 35,000 40,000 80,000 50,000 288,000 40,000 453,0 0 $ 45,000 32,000 273,000 43,000 60,000 453 000