Thankyou in advance.

Paper Corp. purchased 70% of the outstanding shares of Sand Ltd. on January 1. Year 2, at a cost of $80,080. Paper has always used the equity method to account for its investments. On January 1, Year 2, Sand had common shares of $50,000 and retained earnings of $22,000, and fair values were equal to carrying amounts for all its net assets, except inventory (fair value was $3,400 less than carrying amount) and equipment (fair value was $10,200 greater than carrying amount). The equipment, which is used for research, had an estimated remaining life of six years on January 1. Year 2 The following are the financial statements of Paper Corp. and its subsidiary Sand Ltd. as at December 31. Year 5: BALANCE SHEETS At December 31, Year 5 Paper Cash $ Accounts receivable 37,500 Note receivable Inventory 70,500 Equipment (net) 235,000 Land 164, eee Investment in Sand 117,866 $624,866 Bank indebtedness $121, 115 Accounts payable 56,000 Notes payable 30, 2ee Common shares 150, eee Sand $ 13, eee 26,400 30, 2ee 45,500 77,500 33, $225,600 $ 48, 100 50, eee