24:20 Following are separate financial statements of Michael Company and Aaron Company as of December 31, 2021 (credit balances Indicated by parentheses). Michael acquired all of Aaron's outstanding voting stock on January 1, 2017, by issuing 20,000 shares of its own $1 par common stock. On the acquisition date, Michael Company's stock actively traded at $34.50 per share. Michael Company Aaron Company 12/31/21 12/31/21 Revenues $ (635, see) $ (469,500) Cost of goods sold 282,750 189,750 Amortization expense 131,100 121,000 Divideod income (5,000) e Net income $ (226,650 $ (158,758) Retained earnings, 1/1/21 $ (890,000) 5 (25,000 Net income (above) (226,650) (158,750) Dividends declared 90,eee 5, eee Retained earnings, 12/31/21 $(1,026,650) $ (948,750) Cash 5 139,000 $ 16,800 Receivables 397.000 271,000 Inventory 576, eee 376,000 Investment in Aaron Company 690,000 Copyrights 471,000 428,000 Royalty agreements 924, eee 447.ee Total assets $ 3,197,000 $ 1,538,800 Liabilities $(1,072,350) $(460,058) Preferred stock (300,eae) Common stock (5ee,eee) (100, eee) Additional paid-in capital (30,000) (30,000) Retained earnings. 12/31/21 (1.026.650) (948.750) On the date of acquisition, Aaron reported retained earnings of $450,000 and a total book value of $580,000. At that time, its royalty agreements were undervalued by $60,000. This intangible was assumed to have a six-year remaining life with no residual value Additionally, Aaron owned a trademark with a fair value of $50,000 and a 10-year remaining life that was not reflected on its books Aaron declared and paid dividends in the same period 101 a. Using the preceding information, prepare a consolidation worksheet for these two companies as of December 31, 2021 b. Assuming that Michael applied the equity method to this investment, what would the following account balances be on the parent's Individual financial statements? Consolidation Entries Debit Credit Accounts $ Revenues Cost of goods sold Amortization expense Dividend income Michael (635,500) $ 282 750 131 100 (5,000) (226,650) Aaron (469,500) 189,750 121,000 0 (158,750) Consolidated Totals 1,105,000 472,500 252, 100 26 Net income s Retained earning, 1/1/21 (Michael) Retained earning 1/1/21 (Aaron) Net income (above) Dividends declared Retained eamings, 12/31/21 (890,000) 0 (226,650) 90,000 (1,026,650) $ 0 (795,000) (158,750) 5,000 (948,750) $ $ Cash Receivables Inventory Investment in Aaron Co. Copynghts Royalty agreements Trademark Total assets 139,000 $ 397,000 576,000 690,000 471,000 924 000 0 3,197,000 $ 16 800 271000 376,000 428 000 447,000 0 1,538 800 $ 5 Liabilities Preferred stock Common stock Additional paid in capital Retained earings, 12/3121 (above) Totul abilities and equity (1.070,350) (300,000) (500,000) (300,000) (1,026,650) (3.197.000) $ (460.050) 0 (100,000) (30000) (948,750) (1.538.800) $ 0$ Required A Required B Assuming that Michael applied the equity method to this investment, what would the following account balances be on the parent's individual financial statements? Amounts Equity in Earnings of Aaron 12/31/21 Retained earnings, 1/1/21 Investment in Aaron 12/31/21 Retained earnings, 12/31/21