On July 1, 20X8, Pair Logic Corporation acquires 75 percent of Systems Inc. common stock for its underlying book value. At the time of acquisition, the fair value of the noncontrolling interest is equal to its proportionate share of book value of Systems. On January 1, 20X8 Systems reported common stock of $100,000 and retained earnings of $130,000. For the year 20X8, Systems reports the following items:

	Before Combination (January 1 to June 30)			After Combination (July 1 to December 31)
Sales	$	150,000		$	160,000
Cost of Goods Sold		90,000			93,000
Depreciation Expense		20,000			20,000
Other Expenses		15,000			17,000
Net Income		25,000			30,000
Dividends		15,000			18,000

Pair Logic uses the equity method in accounting for this investment.

Based on the preceding information, what is the fair value of the noncontrolling interest at the time of acquisition?

Multiple Choice

• $47,813

• $57,500

• $60,000

• $45,000