Primadonna Company acquired 75 percent of the stock of Slacks Inc. on January 1, 2015, for $280,000. On this date, the balances of Slacks stockholders equity accounts were Common Stock, $195,000, and Retained Earnings, $45,000. As of that date, the fair market value for the 25% of shares not purchased by Primadonna was $90,000.

On January 1, 2015, Slacks recorded book values were equal to fair values for all items except four: (1) accounts receivable had a book value of $55,000 and a fair value of $48,000, (2) property, plant & equipment, net, had a book value of $150,000 and a fair value of $168,000, (3) a previously unrecorded customer list intangible asset had a book value of $0 and a fair value of $30,000, and (4) notes payable had a book value of $30,000 and a fair value of $25,000. Both companies use the FIFO inventory method and sell all of their inventories at least once a year. The year-end net balance of accounts receivables are collected in the following year. On the acquisition date, Slacks PP&E, net had a remaining life of 10 years, the customer list had a remaining life of four years, and the note payable had a remaining term of five years.

On January 1, 2018, Primadonna sold a building to Slacks for $80,000. On this date, the building was carried on Primadonnas books at a cost of $100,000 with accumulated depreciation of $45,000. Both companies estimated that the building has a remaining life of 10 years on the intercompany sale date, with no salvage value.

Each company routinely sells merchandise to the other company, with a profit margin of 40 percent of selling price (regardless of the direction of the sale). During 2019, intercompany sales amount to $50,000, of which $20,000 remains in the ending inventory of Slacks. On December 31, 2019, $10,000 of these intercompany sales remain unpaid. Additionally, Primadonnas December 31, 2018 inventory includes $15,000 of merchandise purchased in the preceding year from Slacks. During 2018, intercompany sales amount to $40,000, and on December 31, 2018, $8,000 of these intercompany sales remain unpaid.

Primadonna accounts for its investment in Slacks using the equity method. Unconfirmed profits are allocated pro-rata.

. Prepare schedules that compute the following:

a. Goodwill (as computed on January 1, 2015)

b. Equity income from Slacks (for 2019)

c. Investment in Slacks as of December 31, 2019

d. Income attributable to the noncontrolling interest (for 2019)

e. Noncontrolling interest as of December 31, 2019

Debits	Primadonna	Slacks
Cash	$58,080	$42,500
Accounts receivable	81,000	60,000
Inventories	195,000	91,500
Property, plant & equipment, net	189,000	135,000
Other assets	85,500	150,000
Investment in Slacks	325,500	--
Cost of goods sold	432,000	162,000
Depreciation & amortization expense	18,000	14,400
Operating expenses	226,000	54,100
Interest expense	8,000	3,500
Dividends	90,000	21,000
Total debits	$1,708,080	$734,000
Credits
Accounts payable	$168,000	$35,000
Notes payable	80,980	30,000
Other liabilities	33,000	39,000
Common stock	360,000	195,000
Retained earnings (Jan. 1, 2019)	322,200	165,000
Sales	720,000	270,000
Equity income (loss) from Slacks	23,900	--
Total credits	$1,708,080	$734,000