23. On January 1, 2013, Pepper Enterprises acquired 80 percent of Harlan Company's outstanding common shares in exchange for $3,000,000 cash. The price paid for the 80 percent ownership interest was proportionately representative of the fair value of all of Harlan's shares.
At acquisition date, Harlan's books showed assets of $4,200,000 and liabilities of $1,600,000.
The recorded assets and liabilities had fair values equal to their individual book values except that a building (10-year remaining life) with book value of $195,000 had an appraised fair value of $345,000.
Also, at acquisition date Harlan possessed unrecorded technology processes (zero book value) with an estimated fair value of $1,000,000 and a 20-year life. For 2013 Pepper reported net income of $700,000 (before recognition of Harlan's income), and Harlan separately reported earnings of $350,000. During 2013, Pepper paid dividends of $85,000 and Harlan paid $50,000 in dividends.
Compute the amounts that Pepper Enterprises should report in its December 31, 2013, consolidated financial statement for the following items:
a. Harlan's technology processes.
b. Harlan's building.
c. Controlling interest in consolidated net income.
d. Noncontrolling interest in consolidated net income.
e. Noncontrolling interest.