Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2015, for $751,680 cash. At the acquisition date, Sierras total fair value, including the noncontrolling interest, was assessed at $939,600 although Sierras book value was only $683,000. Also, several individual items on Sierras financial records had fair values that differed from their book values as follows:

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Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2015, for $751,680 cash. At the acquisition date, Sierra's total fair value, including the noncontrolling interest, was assessed at $939,600 although Sierra's book value was only $683,000. Also, several individual items on Sierra's financial records had fair values that differed from their book values as follows Book Value Fair Value Land Buildings and equipment $ 68,200 $ 268,200 350,000 (10-year remaining life) Copyright (20-year life) 105,000 Notes payable (due in 8 years) (205,000 327,000 175,000 (195,400) For internal reporting purposes, Padre, Inc., employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2015, for both companies Padre Sierra Revenues Cost of goods sold Depreciation expense Amortization expense Interest expense Equity in income of Sierra $(1,431,820) $ (635,250) 414,000 12,600 5,250 6,400 764,000 293,000 48,500 (155,680) Net income $ (482,000) (197,000) Retained earnings, 1/1/15 Net income (above) Dividends declared $(1,467,500) (523,000) (482,000) (197,000) 65,000 260,000 Retained earnings, 12/31/15 $(1,689,500) (655,000) t assets $ 1,018,140 685,650 Investment in Sierra Land Buildings and equipment (net) Copyright 855,360 339,000 956,000 68,200 337,400 99,750 Total assets $ 3,168,500 1,191,000 Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings (above) (204,000) $ (171,000) (205,000) (525,000) (450,000) (1,689,500) (300,000) 100,000) (60,000) (655,000) Total liabilities and equities $(3,168,500) (1,191,000)