Problem 3A-3 (LO 5, 8) Cost method, later period, vertical worksheets. Harvard Company purchased a 90% interest in Benz Company for $740,000 on January 1, 20X1. The investment has been accounted for under the cost method. At the time of the purchase, a building owned by Benz was understated by $180,000; it had a 20-year remaining life on the purchase date. The remaining excess was attributed to goodwill. The stockholders’ equity of Benz Company on the purchase date was as follows:

Common stock ($10 par) . . . . . . . . . . . . . . . . $350,000 Retained earnings . . . . . . . . . . . . . . . . . . . . . 200,000 Total equity . . . . . . . . . . . . . . . . . . . . . . . $550,000 The following summarized statements are for the year ending December 31, 20X2:

(Credit balance amounts are in parentheses.)