Pavin acquires all of Stablers outstanding shares on January 1, 2018, for $550,000 in cash. Of this amount, $39,000 was attributed to equipment with a 10-year remaining life and $49,000 was assigned to trademarks expensed over a 20-year period. Pavin applies the partial equity method so that income is accrued each period based solely on the earnings reported by the subsidiary.

On January 1, 2021, Pavin reports $390,000 in bonds outstanding with a carrying amount of $366,000. Stabler purchases half of these bonds on the open market for $189,000.

During 2021, Pavin begins to sell merchandise to Stabler. During that year, inventory costing $116,000 was transferred at a price of $145,000. All but $19,000 (at sales price) of these goods were resold to outside parties by year-end. Stabler still owes $42,000 for inventory shipped from Pavin during December.

The following financial figures are for the two companies for the year ending December 31, 2021. Dividends were both declared and paid during the current year.

	Pavin				Stabler
Revenues	$	(767,000	)		$	(523,000	)
Cost of goods sold		464,000				249,000
Expenses		134,000				167,500
Interest expensebonds		45,000				0
Interest incomebond investment		0				(21,750	)
Loss on extinguishment of bonds		0				0
Equity in Stablers income		(128,250	)			0
Net income	$	(252,250	)		$	(128,250	)
Retained earnings, 1/1/21	$	(354,000	)		$	(379,000	)
Net income (above)		(252,250	)			(128,250	)
Dividends declared		164,000				86,000
Retained earnings, 12/31/21	$	(442,250	)		$	(421,250	)
Cash and receivables	$	226,000			$	44,000
Inventory		184,000				96,000
Investment in Stabler		638,250				0
Investment in Pavin bonds		0				189,750
Land, buildings, and equipment (net)		254,000				550,000
Trademarks		0				0
Total assets	$	1,302,250			$	879,750
Accounts payable	$	(173,000	)		$	(220,500	)
Bonds payable		(390,000	)			(109,000	)
Discount on bonds		21,000				0
Common stock		(318,000	)			(129,000	)
Retained earnings (above)		(442,250	)			(421,250	)
Total liabilities and stockholders equity	$	(1,302,250	)		$	(879,750	)