Question

On January 1, 2020, French Company acquired 60 percent of K-Tech Company for $300,000 when K-Tech’s...

On January 1, 2020, French Company acquired 60 percent of K-Tech Company for $300,000 when K-Tech’s book value was $400,000. The fair value of the newly comprised 40 percent noncontrolling interest was assessed at $200,000. At the acquisition date, K-Tech's trademark (10-year remaining life) was undervalued in its financial records by $60,000. Also, patented technology (5-year remaining life) was undervalued by $40,000.

In 2020, K-Tech reports $30,000 net income and declares no dividends. At the end of 2021, the two companies report the following figures (stockholders’ equity accounts have been omitted):

French Company
Carrying Amounts
K-Tech Company
Carrying Amounts
K-Tech Company
Fair Values
  Current assets $ 620,000 $ 300,000 $ 320,000
  Trademarks 260,000 200,000 280,000
  Patented technology 410,000 150,000 190,000
  Liabilities (390,000 ) (120,000 ) (120,000 )
  Revenues (900,000 ) (400,000 )
  Expenses 500,000 300,000
  Investment income Not given

Note: Parentheses indicate a credit balance.

What amount is reported for trademarks in the 2021 consolidated balance sheet?

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