Padre, Incorporated, buys $80$ percent of the outstanding common stock of Sierra Corporation on January $1,2024,$ for $$680,000$ cash. At the acquisition date, Sierra$$s total fair value, including the noncontrolling interest, was assessed at $$850,000,$ although Sierra$$s book value was only $$600,000.$ Also, several individual items on Sierra$$s financial records had fair values that differed from their book values as follows:

Account Book Value Fair Value

Land $ $60,000$ $ $225,000$

Buildings and equipment $(10-$year remaining life$)275,000250,000$

Copyright $(20-$year remaining life$)100,000200,000$

Notes payable $($due in $8$ years$)(130,000)(120,000)$

For internal reporting purposes, Padre, Incorporated, employs the equity method to account for this investment. The following account balances are for the year ending December $31,2024,$ for both companies.

Account Padre Sierra

Revenues $ $(1,360,000)$ $ $(540,000)$

Cost of goods sold $700,000385,000$

Depreciation expense $260,00010,000$

Amortization expense $05,000$

Interest expense $44,0005,000$

Equity in income of Sierra $(105,000)0$

Net income $ $(461,000)$ $ $(135,000)$

Retained earnings, $1/1/24$ $ $(1,265,000)$ $ $(440,000)$

Net income $(461,000)(135,000)$

Dividends declared $260,00065,000$

Retained earnings, $12/31/24$ $ $(1,466,000)$ $ $(510,000)$

Current assets $ $965,000$ $ $528,000$

Investment in Sierra $733,0000$

Land $292,00060,000$

Buildings and equipment $($net$)877,000265,000$

Copyright $095,000$

Total assets $ $2,867,000$ $ $948,000$

Accounts payable $ $(191,000)$ $ $(148,000)$

Notes payable $(460,000)(130,000)$

Common stock $(300,000)(100,000)$

Additional paid$-$in capital $(450,000)(60,000)$

Retained earnings $($above$)(1,466,000)(510,000)$

Total liabilities and equities $ $(2,867,000)$ $ $(948,000)$

At year$-$end, there were no intra$-$entity receivables or payables.