Plc purchased 50% of the voting shares of Slee for 3500 000 cash on January 1.203. Puses the cost method to account for is investment. On that date's Common Stock and Retained Eamings were valued at $200,000 and $400.000 respectively The Trademark had a fair value which was $150,000 higher than its carrying value with S's inventory had a fair value which was $20.000 less than book value. This inventory was sold by in 2013 S has a lucrative four-year contract with the local government Experts believed that this contract has a value of $100,000 Both companies use straight line amortization exclusively for all assets and liabilities. The effective tax rate for both companies 40% The Financial Statements of P&S for the Year ended December 31.2006 are shown below Income Statements Other Revenues $1030000 $250,000 $900.000 $100.000 Cost of Goods Sold $650,000 $600.000 Depreciation & amortization Expense 530.000 20.000 Other Expernes $120.000 580,000 Income Tax Expense $150,000 $120,000 Net Income $330,000 $180.000 Retained Earnings Statements Balance Jan 1, 2016 $330.000 $100,000 Click Save and Subm to save and somit. Click Save A Antal Question Competion Status Retained Earnings $1.330.000 $580,000 Balance Sheets Elec Cash $110,000 Accounts Receivable $120.000 $150.000 $170.000 Inventory $200.000 $125,000 $900,000 36.000 Land $110,000 $190.000 Equipment $150.000 Total A $1,550.000 10.000 $860,000 Current Liab $160.000 500.000 Common Shares $100,000 $200,000 Retained Earnings $1.330.000 $580.000 Total Liabilities and Equity $1,590,000 Other Information 1 During December 2006 S sold inventory to P for $120.000 cash the cost of the inventory to ww $90,000 40% of these goods remained inventory at the end of 2006 2 During December 20X5 P sold inventory to S for $80,000 cash the cost of the inventory to P was $70,000 60% of these goods remained in s inventory at the end of 20X5 S eventually sold the entire inventory to an outside customer in 2 3. The Common Shares of P&S did not change since the date of acquisition 4. Both companies use straight line amortization exclusively for all assets and b The effective tax rate for both comes 405 Click Save and Submit to save and admit. Click Save All Anneurs to OL .com/ultra/cous11243 Question Completion S 2. During December 2005 Psold inventory to 3 for $80 000 cash, the cost of the inventory to Pwas $70,000 60% of these goods remained in inventory at the end of 2005 S eventually sold the entire inventory to an outside customer in 20 3 The Common Shares of P&S did not change since the date of Both companies hight amortization caly for all assets and i 5 The effective tax rate for both companies 40% 6 For Consolidation uses the Fair Value Enterprise mod