On January 2, Year 4, Brady Ltd., a private company, purchased 80% of the outstanding shares of Partridge Ltd. for $4,620,000. Partridge's statement of financial position and the fair values of its identifiable assets and liabilities for that date were as follows: Plant and equipment (net) Patents (net) Inventory Accounts receivable Cash Carrying Amount $ 4,750,000 1,250,000 2,250,000 Fair Value $4,750,000 1,800,000 2,500,000 1,750,000 550,000 Ordinary shares Retained earnings 10% bonds payable Accounts payable 1,750,000 550,000 $10,550,000 $ 2,051,000 2,800,000 3,250,000 2,449,000 $10,550,000 3,600,000 2,449,000 The patents had a remaining useful life of ten years on the acquisition date. The bonds were issued on January 1, Year 2, and mature on December 31, Year 13. Goodwill impairment losses were as follows: Year 4: $40,000 Year 6: $26,250 Partridge declared and paid dividends of $125,000 in Year 6. Brady uses ASPE for reporting purposes. It elected to use the straight-line method to amortize any premium or discount on bonds payable. On December 31, Year 6, the financial statements of the two companies were as follows: