Nascent, Inc., acquires 60 percent of Sea-Breeze Corporation for $414,000 cash on January 1, 2015. The remaining 40 percent of the Sea-Breeze shares traded near a total value of $276,000 both before and after the acquisition date. On January 1, 2015, Sea-Breeze had the following assets and liabilities:
_____________________________________ Book Value ______________ Fair Value
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . $150,000 . . . . . . . . . . . . . . . . $150,000
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000 . . . . . . . . . . . . . . . . . 200,000
Buildings (net) (6-year remaining life) . . . . . . . . .300,000 . . . . . . . . . . . . . . . . . 360,000
Equipment (net) (4-year remaining life) . . . . . . . .300,000 . . . . . . . . . . . . . . . . . 280,000
Patent (10-year remaining life) . . . . . . . . . . . . . . . . -0- . . . . . . . . . . . . . . . . . . . 100,000
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(400,000) . . . . . . . . . . . . . . . (400,000)
The companies' financial statements for the year ending December 31, 2018, follow:

Answer the following questions:
a. How can the accountant determine that the parent has applied the initial value method?
b. What is the annual excess amortization initially recognized in connection with this acquisition?
c. If the parent had applied the equity method, what investment income would the parent have recorded in 2018?
d. What amount should the parent report as retained earnings in its January 1, 2018, consolidated balance sheet?
e. What is consolidated net income for 2018 and what amounts are attributable to the controlling and non-controlling interests?
f. Within consolidated statements at January 1, 2018, what balance is included for the subsidiary's Buildings account?
g. What is the consolidated Buildings reported balance as of December 31, 2018?

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Nascent Sea-Breeze $ (600,000) 410,000 $(300,000) 210,000 Revenues Operating expenses... Investment income.... 42 Net income $ (232,0 $ (700,000) (232,000) 92,000 $ (300,000) (90,000) 70,000 $(320,000) $ 100,000 200,000 200,000 500,000 Retained earnings, 1/1/18 Net income Dividends declared $ (840,0 Retained earnings, 12/31/18 Current assets Land Buildings (net) Equipment (net) Investment in Sea-Breeze $ 330,000 220,000 700,000 400,000 414,000 $ 2,064,000 $1,000,000 Total assets Liabilities Common stock Retained earnings, 12/31/18 $(500,000) (724,000) (840,000) $(2.064,000) $(200,000) (480,000) (320,000) Total liabilities and equities 1.000000