On its December 31, 2018, consolidated balance sheet, what amount should Phoenix report for Sedona's customer list?

a. $10,000

b. $20,000

c. $25,000

d. $50,000

On January 1, 2016, Phoenix Co. acquired 100 percent of the outstanding voting shares of Sedona Inc., for $600,000 cash. At January 1, 2016, Sedona's net assets had a total carrying amount of $420,000. Equipment (eight-year remaining life) was undervalued on Sedona's financial records by $80,000. Any remaining excess fair over book value was attributed to a customer list developed by Sedona (four-year remaining life), but not recorded on its books. Phoenix applies the equity method to account for its investment in Sedona. Each year since the acquisition, Sedona has declared a $20,000 dividend. Sedona recorded net income of $70,000 in 2016 and $80,000 in 2017.

Selected account balances from the two companies' individual records were as follows:

............................................................Phoenix................ Sedona

2018 Revenues ..............................$498,000 ..............$285,000

2018 Expenses .................................350,000 ...............195,000

2018 Income from Sedona ...............55,000

Retained earnings 12/31/18 ...........250,000 ................175,000