Situation On January 1, 2018, Northridge Corporation acquired Reseda Corporation by purchasing 100% of the stock of Reseda in exchange for 40,000 shares of Northridge stock. On the date of acquisition Northridge stock traded for $18 per share on the stock exchange. The book values of each company on January 1, 2018, are shown belovw. Northridse CorReseda Corp Current assets Noncurrent assets Current liabilities Noncurrent liabilities Owners' equity $640,000 1,280,000 420,000 140,000 760,000 100,000 180,000 620,000 300,000 1,200,000 Additional information The fair market value of Reseda's inventory is $20,000 higher than the book value. During 2018, the following transactions occurred: 1. Northridge sold inventory to Reseda for $100,000 on account. The normal profit on sales for Northridge is 40%. At December 31, 2018, Reseda had 20% of the goods remaining in ending inventory. At December 31, 2018, Reseda had not paid Northridge for $16,000 of the inventory 2. On October 1, 2018, Reseda Corp., sold equipment to Northridge for $48,000. The equipment was purchased by Reseda on 1/1/15 for $120,000 and was depreciated straight-line over five years with no salvage value. Northridge depreciated the new equipment over three years with no salvage value. At December 31, 2018, totals from the preclosing trial balances of both firms are as follows Northridge Corporation & Subsidiaries UNADJUSTED TRIAL BALANCE December 31, 2018 Northridge Corp Reseda Corp. Revenues Expenses Current assets Noncurrent assets Current liabilities Noncurrent liabilities Owners' equity 2,000,000 1,560,000 800,000 2,520,000 600,000 360,000 1,920,000 800,000 670,000 220,000 840,000 140,000 170,000 620,000