Consolidation subsequent to date of acquisition-Equity method with noncontrolling interest and AAP Assume, on January 1, 2015, a parent company acquired a 90% interest in its subsidiary. The total fair value of the controlling and noncontrolling interest was $405,000 over the book value of the subsidiary's Stockholders' Equity on the acquisition date. The parent assigned the excess to the following [A] assets: [A] Asset Original Original Amount Useful Life 10 years 85,000 190,000 $405,000 5 years Indefinite Property, plant, and equipment $130,000 Customer list Goodwill 90% of the Goodwill is allocated to the parent. The parent and the subsidiary report the following pre-consolidation financial statements at December 31, 2019: Parent Subsidiary Parent Subsidiary Income statement: Balance sheet: Sales $5,760,000 1,490,000 Assets Cost of goods sold (4,000,000) (960,000) Cash Gross profit Equity income Operating expenses 1,760,000 90,000 (1,120,000) 530,000 Accounts receivable Inventory (400,000) Equity investment Net income 730,000 130,000 Property, plant and equipment, net $400,000 $50,000 752,000 200,000 960,000 440,000 850,500 2,240,000 720,000 Statement of retained earnings: $ 5,202,500 $1,410,000 Beginning retained earnings: 1,352,500 Net income Dividends Ending retained earnings 730,000 (160,000) (40,000) Long-term liabilities $1,922,500 $490,000 Common stock APIC 400,000 Liabilities and stockholders' equity 130,000 Accrued liabilities 800,000 320,000 1,600,000 400,000 160,000 80,000 720,000 120,000 Retained earnings 1,922,500 490,000 $ 5,202,500 $1,410,000