Search (Al-Q) Femmes Mailings Review View Help K On 1/1/Y1, Hazel paid $2,400,000 cash to acquired 80% of voting common stock wh Henry's book value was $1,850,000 and fair market value (FMV) was $3,000,000. He has neither issued nor reacquired any its own treasury stock since 1/1/Y1. Allof Henry's book value of assets and liabilities were the same as the FMV on 1/1/Y except for the patent account, which was undervalued by $700,000 with a five-year remaining life. Separate financial statements for these two companies as of 12/31/Y Revenues Cost of goods sold Depreciation expense Hazel Henry $(3,480,000) $(1,900,000) 1,640,000 1,000,000 208,000 170,000 Amortization expense 440,000 240,000 Interest expens 40,000 30,000 Equity in earnings of Henry (248,000) 0 Net income $(1,400,000) $(460,000) Retained earnings, 1/1/Y3 $(5,600,000) $(690,000) Net income (1,400,000) (460,000) Dividends declared 400,000 50,000 Retained earnings, 12/31/Y3 5(6,600,000) $(1,100,000) Cash $1,070,000 $230,000 Accounts receivable 1,150,000 430,000 Inventory 1,980,000 1,600,000 Investment in Henry Buildings and equipment Patents Total assets $10,990,000 2,840,000 0 2,050,000 1,726,000 1,900,000 214,000 $4,200,000 P P B $ 44 4 R % 5 L E FB 96 + 8 DO " & 87 * 8 T Y U F10 9 O