Check my work Following are separate financial statements of Michael Company and Aaron Company as of December 31, 2018 (credit balances indicated by parentheses), Michael acquired all of Aaron's outstanding voting stock on January 1, 2014, by issuing 20,000 shares of its own $1 par common stock. On the acquisition date, Michael Company's stock actively traded at $30 per share. Michael Company 12/31/18 Aaron Company 12/31/18 $ (477,000) Revenues Cost of goods sold Amortization expense Dividend income $ (745,000) 337,500 132,900 193,500 100,500 Net income (279,600) (183,000) Retained earnings, 1/1/18 Net incone (above) Dividends declared $ (956,000) (279,600) 90,000 (183,000) 5,000 Retained earnings, 12/31/18 (1,145, 600) $ (829,000) $ 21,400 Cash Receivables Inventory Investment in Aaron Company Copyrights Royalty agreements $ 171,000 459,000 614,000 600,000 500,000 1,010,000 $3,354,000 285,000 357,000 391,000 436,000 Total assets 1,490,400 5 400 $ (531,400 Liabilities Preferred stock Common stock Additional paid-in capital Retained earnings, 12/31/18 9(1,108,400) (300,000) (500,000) (300,000) (1.145,600) (3,354,000) (100, 000) (30,000) (829,000) (1,490,400) Total liabilities and equity On the date of acquisition, Aaron reported retained earnings of $360,000 and a total book value of $490,000. At that time, its royalty agreements were undervalued bv $60,000. This intanaible was assumed to have a six-vear remainina life with no residual value. KPrey 4 of 13 Next