Determining ending consolidated balances in the second year following the acquisitionCost method Assume a parent company acquired a subsidiary on January 1, 2015, for $2,186,000. The purchase price was $1,066,200 in excess of the subsidiarys $1,119,800 book value of Stockholders Equity on the acquisition date. Of this excess purchase price, $602,000 was assigned to Property, plant and equipment with a remaining economic useful life of 10 years, and $464,200 was assigned to Goodwill. On the acquisition date, the subsidiary reported retained earnings equal to $847,550. The parent uses the cost method of pre-consolidation Equity investment bookkeeping. The financial statements of the parent and its subsidiary for the year ended December 31, 2016, are as follows:At what amount will retained earnings appear on the consolidated financial statements?

Parent Subsidiary Parent Subsidiary Income statement Balance sheet Sales Cost of goods sold Gross profit Equity income Operating expenses Net income Statement of retained earnings BOY retained earnings $8,318,750 $1,900,000 Assets (5,989,500) (1,089,000) Cash 2,329,250 811,000 Accounts receivable 37,400 Inventory (1,247,840) (556,900) Equity investment $1,118,810 $254,100 Property, plant & equipment $1,567,280 $468,600 2,462,900 421,300 3,476,850 540,650 2,186,000 17,189,920 1,000,450 $26,882,950 $2,431,000 Net income Dividends 5,801,070 937,750 Liabilities and stockholders' equity 1,118,810 254,100 Accounts payable (262,570) (37,400) Accrued liabilities $6,657,310 $1,154,450 Long-term liabilities Common stock Ending retained earnings $1,217,920 $173,030 1,447,270 226,270 10,587,500 605,000 1,025,060 121,000 5,947,890 151,250 6,657,310 1,154,450 $26,882,950 $2,431,000 APIC Retained earnings