Pavin acquires all of Stabler's outstanding shares on January 1, 2015, for $560,000 in cash.

Pavin acquires all of Stabler's outstanding shares on January 1, 2015, for $560,000 in cash. Of this amount, $40,000 was attributed to equipment with a 10-year remaining life and $50,000 was assigned to trademarks expensed over a 20-year period. Pavin applies the partial equity method so that income is accrued each period based solely on the earnings reported by the subsidiary.