Hoyle, Schaefer and Doupnik $$ Chapter $6$ Problem $39$

Pavin acquires all of Stabler$$s outstanding shares on January $1,2021,$ for $$460,000$ in cash. Of this amount, $$30,000$ was attributed to equipment with a $10-$year remaining life and $$40,000$ was assigned to trademarks expensed over a $20-$year period. Pavin applies the partial equity method so that income is accrued each period based solely on the earnings reported by the subsidiary.

On January $1,2024,$ Pavin reports $$300,000$ in bonds outstanding with a carrying amount of

$$282,000.$ Stabler purchases half of these bonds on the open market for $$145,500.$

During $2024,$ Pavin begins to sell merchandise to Stabler. During that year, inventory costing

$$80,000$ was transferred at a price of $$100,000.$ All but $$10,000($at sales price$)$ of these goods were resold to outside parties by year end. Stabler still owes $$33,000$ for inventory shipped from Pavin during December.

The following financial figures are for the two companies for the year ending December $31,2024.$ Dividends were both declared and paid during the current year.