Pop Corporation acquired 70 percent of Soda Company's voting common shares on January 1, 20X2, for $109,200. At that date, the noncontrolling interest had a fair value of $46,800 and Soda reported $71,000 of common stock outstanding and retained earnings of $30,000. The differential is assigned to buildings and equipment, which had a fair value $20,000 higher than book value and a remaining 10-year life, and to patents, which had a fair value $35,000 higher than book value and a remaining life of five years at the date of the business combination. Trial balances for the companies as of December 31, 20X3, are as follows:

	Pop Corporation								Soda Company
Item		Debit			Credit				Debit				Credit
Cash & Accounts Receivable		$	20,400						$	26,600
Inventory			170,000							40,000
Land			85,000							45,000
Buildings & Equipment			390,000							265,000
Investment in Soda Company			113,920
Cost of Goods Sold			191,000							84,800
Depreciation Expense			25,000							20,000
Interest Expense			21,000							7,200
Dividends Declared			35,000							20,000
Accumulated Depreciation					$	145,000							$	90,000
Accounts Payable						97,400								40,000
Bonds Payable						260,400								100,000
Bond Premium														2,600
Common Stock						125,000								71,000
Retained Earnings						132,900								65,000
Sales						265,000								140,000
Other Income						14,600
Income from Soda Company						11,020
		$	1,051,320		$	1,051,320			$	508,600			$	508,600

On December 31, 20X2, Soda purchased inventory for $35,000 and sold it to Pop for $50,000. Pop resold $30,000 of the inventory (i.e., $30,000 of the $50,000 acquired from Soda) during 20X3 and had the remaining balance in inventory at December 31, 20X3. During 20X3, Soda sold inventory purchased for $56,000 to Pop for $80,000, and Pop resold all but $23,000 of its purchase. On March 10, 20X3, Pop sold inventory purchased for $15,000 to Soda for $30,000. Soda sold all but $7,500 of the inventory prior to December 31, 20X3. Assume Pop uses the fully adjusted equity method, that both companies use straight-line depreciation, and that no property, plant, and equipment has been purchased since the acquisition.

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