Equity income, inventory, fixed asset sale. Schinzer Company purchases an influential 25% interest in Fowler Company on January 1, 2016, for $300,000. At that time, Fowler’s stockholders’ equity is...

Equity income, inventory, fixed asset sale. Schinzer Company purchases an influential 25% interest in Fowler Company on January 1, 2016, for $300,000. At that time, Fowler’s stockholders’ equity is $1,000,000.

Fowler Company assets have fair value similar to book value except for a building that is undervalued by $40,000. The building has an estimated remaining life of 10 years. Any remaining excess is attributed to goodwill.