Rapid Delivery Corporation was created on January 1, 20X2, and quickly became successful. On January 1, 20X6, the owner sold 80 percent of the stock to Samuelson Company at underlying book value. At the date of acquisition, the fair value of the noncontrolling interest was equal to 20 percent of the book value of Rapid Delivery. Samuelson has continued to operate the subsidiary as a separate legal entity and uses the cost method in recording investment income.

Rapid Delivery's retained earnings on the date of acquisition was $100,000.

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Item Cash and Receivables Inventory Land Buildings and Equipment Investment in Stanley Wood Products Stock Cost of Goods Sold Depreciation Expense Inventory Losses Dividends Declared Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings Sales Dividend Income Master Corporation Debit $ 81,000 260,000 80,000 500,000 160,000 120,000 25,000 15,000 30,000 Credit $ 205,000 60,000 200,000 300,000 Stanley Wood Products Company Debit Credit $ 65,000 90,000 80,000 150,000 50,000 15,000 5,000 10,000 $105,000 20,000 50,000 100,000 298,000 200,000 8,000 $1,271,000 $1,271,000 $465,000 $465,000 90,000 100,000