Question Two Palestine Corp. acquired 80% of Sahara Corp. common stock for $240,000 on Jan.1, 2018. The fair value of noncontrolling interest is $60,000 which is equal the book value of net assets of Sahara Corp. (common stock $200,000 and retained earning $100,000), assume following intra- Company transactions occurred during 2018: Palestine Corp. Sold Sahara inventory had a cost of $45,000 for $60,000. Half of them were sold to third party by $40,000 while remaining still on hand at Dec.31, 2018 Sahara sold Palestine a land had a cost of $10,000 by $13,000 and the land still on hand at Dec. 31, 2018 On Jan 1, 2018 Palestine sold Sahara an equipment has a useful life of 5 years, cost of $50,000 and accumulated depreciation $20,000 by $36,000. The equipment has remaining useful life of 3 years Palestine and Sahara determined separate net income of $180,000 and $70,000 respectively and no dividends has been paid for the year