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On January 1,2021, Pomona Company acquired 70% of Sun Incorporated by paying $650,000. This included a $20,000 control premium. Sun reported common stock on that date of $420,000 with retained earnings of $252,000. An equipment was undervalued in the company's financial records by $28,000. This equipment had a ten-year remaining life. In addltion, Sun held a patent worth $80,000 that had a 20-year remaining life but was not recorded on its financial records.
Sun earned income and paid cash dividends as follows:
\table[[,Net Income,Dividends Paid],[2021,$105,000,$54,600
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