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58. On January 1, 2020, Paloma Corporation exchanged $1,710,000 cash for 90 percent of the out- standing voting stock of San Marco Company. The consideration transferred by Paloma provided a reasonable basis for assessing the total January 1, 2020, fair value of San Marco Company. At the acquisition date, San Marco reported the following owners' equity amounts in its balance sheet: Common stock $400,000 Additional paid-in capital 60,000 Retained earnings 265,000 In determining its acquisition offer, Paloma noted that the values for San Marco's recorded assets and liabilities approximated their fair values. Paloma also observed that San Marco had developed internally a customer base with an assessed fair value of $800,000 that was not reflected on San Marco's books. Paloma expected both cost and revenue synergies from the combination. At the acquisition date, Paloma prepared the following fair-value allocation schedule: Fair value of San Marco Company $1,900,000 Book value of San Marco Company 725,000 Excess fair value . . 1, 175,000 to customer base (10-year remaining life) . 800,000 to goodwill $ 375,000 At December 31, 2021, the two companies report the following balances: Paloma San Marco Revenues $(1,843,000) $ (675,000 Cost of goods sold 1,100,000 322,000 Depreciation expense 125,000 120,000 Amortization expense 275,000 11,000 Interest expense 27,500 7,000 Equity in income of San Marco (121,500 -0- Net income. .. .. $ (437,000) $ (215,000 Retained earnings, 1/1 $(2,625,000) $ (395,000 Net income (437,000) (215,000) Dividends declared 350,000 25,000 Retained earnings, 12/31 $(2,712,000 $ (585,000 Current assets .. $ 1,204,000 430,000 Investment in San Marco 1,854,000 -0- Buildings and equipment 931,000 863,000 Copyrights 950,000 107,000 Total assets .. $ 4,939,000 $ 1,400,000 Accounts payable $ (485,000) $ (200,000) Notes payable (542,000) (155,000 Common stock . (900,000) (400,000) Additional paid-in capital (300,000) (60,000) Retained earnings, 12/31 (2,712,000) (585,000 Total liabilities and equities $(4,939,000) $(1,400,000 At year-end, there were no intra-entity receivables or payables. a. Determine the consolidated balances for this business combination as of December 31, 2021. b. If instead the noncontrolling interest's acquisition-date fair value is assessed at $167,500, what changes would be evident in the consolidated statements