Preston acquired 70% of Sanchez in January 2010. In allocating the newly acquired subsidiary's fair value at the acquisition date, Preston noted that Sanchez had developed a customer list worth $65,000 that was unrecorded on its accounting records and had a five year remaining life. Any remaining excess value over Sanchez's book value was attributed to goodwill. During 2011 Sanchez sells inventory costing $120,000 to Preston for $160,000. Of this amount, 20% remains unsold in Preston's warehouse at year-end.