Allen Company acquired 100 percent of Bradford Company's voting stock on January 1, 2014, by issuing 10,000 shares of its $10 par value common stock (having a fair value of $14.5 per share). As of that date, Bradford had stockholders' equity totaling $104,800. Land shown on Bradford's accounting records was undervalued by $12,300. Equipment (with a five-year remaining life) was undervalued by $7,300. A secret formula developed by Bradford was appraised at $20,600 with an estimated life of 20 years Following are the separate financial statements for the two companies for the year ending December 31, 2018. There were no intra- entity payables on that date. Credit balances are indicated by parentheses Allen Company $(740,000) Bradford Company (227,500) Revenues Cost of goods sold Depreciation expense Subsidiary earnings 245,000 156,750 (83,010) 85,000 57,000 Net income $ (421,260) $ (85,500) $ (726,000) Retained earnings, 1/1/18 Net income (above) Dividends declared (117,600) (85,500) 40,000 (163,100) (421,260) 175,500 $ (971,760) $ 340,000 Retained earnings ,12/31/18 $ 84,000 Current assets Investment in Bradford Company Land Buildings and equipment (net) 255,850 492,000 808,000 65,700 174,000 323,700 (95,600) (60,000) $ 1,895,850 $ (234,090) Total assets Current liabilities Common stock Additional paid-in capital Retained earnings, 12/31/18 (600,000) (90,000) (5,000) (971,760)(163,100 $ (1,895,850) Total liabilities and equity $ (323,700)