Pet Corp acquired 80% of She on January 1, 2011 for $320,000 in cash Has: Capital Stock of $200,000 and Retained Earnings of $100,000 In the purchase it was identified that an Equipment was underestimated by $100,000 Detail at the end of the Pet and She period as follows: Combined Income and Retained Earnings Statement for the Year Ended December 31, 2011 Pet She Sales $ 180,000.0 $ 50,000.0 Interco sales 50,000.0 Income from She $ 15,600.0 Interest income 10,000.0 Cost of goods sold (110,000.0) (30,000.0) Interco cost (30,000.0) Operating expenses (30,000.0) (18,000.0) Interest expense (18,000.0) Controlling share of net income $ 37,600.0 $ 32,000.0 Add: Beginning retained earnings 294,000.0 100,000.0 Deduct: Dividends (20,000.0) (15,000.0) Ending retained earnings $ 311,600.0 $ 117,000.0 Balance Sheet at December 31, 201