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Problem II. (100 Points). On January 1, 2014, Parent Co. acquired 80% of Sub Inc. by paying $800,000. Noncontrolling interest was valued at $200,000. Sub
Problem II. (100 Points). On January 1, 2014, Parent Co. acquired 80% of Sub Inc. by paying $800,000. Noncontrolling interest was valued at $200,000. Sub reported common stock on that date of $520,000 with retained earnings of $352,000. A building was undervalued in the company's financial records by $18,000. This building had a ten-year remaining life. Copyrights of $80,000 were not recognized and should be amortized over 20 years. Sub earned income and paid cash dividends as follows:
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