Pesto Company paid $164,000 to acquire 40 percent ownership of Sauce Company on January 1, 20X2. Net book value of Sauce's assets on that date was $300,000. Book values and fair values of net assets held by Sauce were the same except for equipment and patents. Equipment held by Sauce had a book value of $70,000 and fair value of $120,000. All of the remaining purchase price was attributable to the increased value of patents with a remaining useful life of eight years. The remaining economic life of all depreciable assets held by Sauce was five years.