On January 1,20X2,Pint Corporation Acquired 80 Percent of Size Corporation

Multiple Choice

On January 1,20X2,Pint Corporation acquired 80 percent of Size Corporation for $200,000 cash.Size reported net income of $25,000 each year and dividends of $5,000 each year for 20X2,20X3,and 20X4.On January 1,20X2,Size reported common stock outstanding of $160,000 and retained earnings of $40,000,and the fair value of the noncontrolling interest was $50,000.It held land with a book value of $90,000 and a market value of $100,000,and equipment with a book value of $40,000 and a market value of $48,000 at the date of combination.The remainder of the differential at acquisition was attributable to an increase in the value of patents,which had a remaining useful life of eight years.All depreciable assets held by Size at the date of acquisition had a remaining economic life of eight years.Pint uses the equity method in accounting for its investment in Size.
-Based on the preceding information,the increase in the fair value of patents held by Size is

A) $10,000
B) $18,000
C) $32,000
D) $50,000