Problem $4-10($LO $2,3)80\%,$ equity, excess distributions, merchandise, equip$-$ment sales.On January $1,2015,$ Peanut Company acquired $80\%$ of the common stock ofSalt Company for $$200,000.$ On this date, Salt had total owners' equity of $$200,000($includingretained earnings of $$100,000).$ During $2015$ and $2016,$ Peanut appropriately accounted for itsinvestment in Salt using the simple equity method Any excess of cost over book value is attributable to inventory $($worth $$12,500$ more thancost$),$ to equipment $($worth $$25,000$ more than book value$),$ and to goodwill. FIFO is used forinventories. The equipment has a remaining life of four years, and straight$-$line depreciation isused. On January $1,2016,$ Peanut held merchandise acquired from Salt for $$20,000.$ During$2016,$ Salt sold merchandise to Peanut for $$40,000,$ $$10,000$ of which was still held by Peanuton December $31,2016.$ Salt's usual gross profit is $50\%.$On January $1,2015,$ Peanut sold equipment to Salt at a gain of $$15,000.$ Depreciation isbeing computed using the straight$-$line method, a $5-$year life, and no salvage value.The following trial balances were prepared for the Peanut and Salt companies for December$31,2016$: PeanutCompanySaltCompanyInventory, December $31......................................\mathrm{.}130,00050,000$Other Current Assets $.........................................\mathrm{.}241,000235,000$Investment in Salt Company $...................................\mathrm{.}308,000$Other Long$-$Term Investments $...................................\mathrm{.}20,000$Land. $.....................................................\mathrm{.}140,00080,000$Buildings and Equipment $......................................\mathrm{.}375,000200,000$Accumulated Depreciation $.....................................(120,000)(30,000)$Other Intangible Assets $.......................................\mathrm{.}20,000$Current Liabilities $.............................................(150,000)(70,000)$Bonds Payable. $..............................................(100,000)$Other Long$-$Term Liabilities $.....................................(200,000)(50,000)$Common Stock $..............................................(200,000)(50,000)$Paid$-$In Capital in Excess of Par $..................................(100,000)(50,000)$Retained Earnings, January $1,2016..............................(320,000)(150,000)$Sales $................................................. 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