A parent company acquired 100 percent of the stock of a subsidiary company on January 1, 2018, for $270,000. On this date, the balances of the subsidiary's stockholders' equity accounts were Common Stock, $163,800, and Retained Earnings, $17,640. On January 1, 2018, the subsidiary's recorded book values were equal to fair values for all items except four: (1) accounts receivable had a book value of $50,400 and a fair value of $45,360, (2) build- ings and equipment, net had a book value of $44,100 and a fair value of $66,780, (3) the Customer List intangible asset had a book value of $12,600 and a fair value of $65,520, and (4) notes payable had a book value of $27,000 and a fair value of $25,200. Both companies use the FIFO inventory method and sell all of their inventories at least once per year. The net balance of accounts receivable is collected in the following year. On the acquisition date, the subsidiary's buildings and equipment, net had a remain- ing useful life of 6 years, the Customer List had a remaining useful life of 7 years, and notes payable had a remaining term of 4 years. On January 1, 2021, the parent sold a building to the subsidiary for $81,900. On this date, the building was carried on the parent's books (net of accumulated depreciation) at $63,000. Both compa- nies estimated that the building has a remaining life of 6 years on the intercompany sale date, with no salvage value. Each company routinely sells merchandise to the other company, with a profit margin of 25 per- cent of selling price (regardless of the direction of the sale). During 2022, intercompany sales amount to $18,900, of which $10,080 of merchandise remains in the ending inventory of the parent. On December 31, 2022, $5,040 of these intercompany sales remained unpaid. Additionally, the subsidiary's December 31, 2021, inventory includes $15,120 of merchandise purchased in the preceding year from the parent. During 2021, intercompany sales amount to $22,500, and on December 31, 2021, $3,600 of these inter- company sales remained unpaid. Following are pre-consolidation financial statements of the parent and its subsidiary for the year ended December 31, 2022. The parent uses the equity method of pre-consolidation investment bookkeeping. Parent Subsidiary Parent Subsidiary Income statement: Balance sheet: Sales... $612,000 $226,800 Cash... $ 43,020 $ 18,900 Cost of goods sold (309,600) (136,080) Accounts receivable 67,500 Inventories 163,800 61,200 58,500 Gross profit... 302,400 90,720 Buildings and equipment, net. 158,400 113,400 Deprec. & amort. expense (15,120) (12,060) Other assets... 72,000 126,000 Operating expenses. (196,560) (48,420) Customer list. 0 12,600 Total expenses.. (211,680) (60,480) Investment in subsidiary. 334,980 0 Income (loss) from subsidiary 23,310 Total assets.. $839,700 $390,600 Net income... $114,030 $ 30,240 Accounts payable. $ 40,500 Retained earnings statement: Notes payable. Other liabilities 63,000 $ 16,200 27,000 27,720 32,400 Beginning retained earnings.. $367,650 $138,600 Common stock 302,400 163,800 Net income... 114,030 30,240 Retained earnings 406,080 151,200 Dividends.. (75,600) (17,640) Total liabilities and equity $839,700 $390,600 Ending retained earnings $406,080 $151,200