Plaza, Inc., acquires 80 percent of the outstanding common stock of Stanford Corporation on January 1, 2018, in exchange for $900,000 cash. At the acquisition date, Stanfords total fair value, including the noncontrolling interest, was assessed at $1,125,000. Also at the acquisition date, Stanford's book value was $690,000.

Several individual items on Stanfords financial records had fair values that differed from their book values as follows:

	Book Value				Fair Value
Tradenames (indefinite life)	$	360,000			$	383,000
Property and equipment (net, 8-year remaining life)		290,000				330,000
Patent (14-year remaining life)		132,000				272,000

For internal reporting purposes, Plaza, Inc., employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2018, for both companies.

	Plaza				Stanford
Revenues	$	(1,400,000	)		$	(825,000	)
Cost of goods sold		774,000				395,750
Depreciation expense		328,000				36,250
Amortization expense						28,000
Equity in income of Stanford		(280,000	)			0
Net income	$	(578,000	)		$	(365,000	)
Retained earnings, 1/1/18	$	(1,275,000	)		$	(530,000	)
Net income		(578,000	)			(365,000	)
Dividends declared		300,000				50,000
Retained earnings, 12/31/18	$	(1,553,000	)		$	(845,000	)
Current assets	$	860,000			$	432,250
Investment in Stanford		1,140,000				0
Tradenames		240,000				360,000
Property and equipment (net)		1,030,000				253,750
Patents		0				104,000
Total assets	$	3,270,000			$	1,150,000
Accounts payable	$	(142,000	)		$	(145,000	)
Common stock		(300,000	)			(120,000	)
Additional paid-in capital		(1,275,000	)			(40,000	)
Retained earnings (above)		(1,553,000	)			(845,000	)
Total liabilities and equities	$	(3,270,000	)		$	(1,150,000	)