On December 31,20X8,Peak Corporation Acquired 80 Percent of Summit Company's

Multiple Choice

On December 31,20X8,Peak Corporation acquired 80 percent of Summit Company's common stock for $160,000.At that date,the fair value of the noncontrolling interest was $40,000.Of the $75,000 differential,$10,000 related to the increased value of Summit's inventory,$20,000 related to the increased value of its land,and $25,000 related to the increased value of its equipment that had a remaining life of 10 years from the date of combination.Summit sold all inventory it held at the end of 20X8 during 20X9.The land to which the differential related was also sold during 20X9 for a large gain.At the date of combination,Summit reported retained earnings of $75,000 and common stock outstanding of $50,000.In 20X9,Summit reported net income of $60,000,but paid no dividends.Peak accounts for its investment in Summit using the equity method.
-Based on the preceding information,what is the amount of write-off of differential associated with this acquisition recorded by Peak during 20X9?

A) $0
B) $32,500
C) $26,000
D) $20,000