Illinois Company acquired 90% of the outstanding common stocks of Chicago Company on June 30, 2016, for $426,000. On that date, Chicago Company had retained earnings in the amount of $60,000, and the fair value of its recorded assets and liabilities was equal to their book value. The excess of implied over fair value of the recorded net assets was attributed to an unrecorded manufacturing formula held by Chicago Company, which had an expected remaining useful life of five years from June 30, 2016. Financial data for 2018 are presented here: Balance Sheet at December 31 2018 Income Statement 2018 Cash A/R, net Inventories Other Current Assets Land Plant and Equipment Accumulated Depreciation Investment in Chicago Total Assets Accounts Payable Other Liabilities Capital Stocks APIC Retained earnings, January 1 Dividend Net Income Total equities Illinois 119,500 342,000 362,000 40,500 150,000 825,000 (207,000) 524,250 2,156,250 295,000 43,000 591,200 (100,000) 327,050 2,156,250 Chicago 132,500 125,000 201,000 13,000 241,000 (53,500) 659,000 32,000 19,000 300,000 50,000 139,500 (60,000) 178,500 659,000 Sales Cost of Goods Sold Other Expenses Equity in Chicago Income Net Income Illinois 2,555,500 (1,730,000) (654,500) 156,050 327,050 Chicago 1,120,000 (690,500) (251,000) 178,500 On December 31, 2016, Illinois Company sold equipment (with an original cost of $100,000 and accumulated depreciation of $50,000) to Chicago Company for $97,500. This equipment has since been depreciated at an annual rate of 20% of the purchase price. During 2017 Chicago Company sold land to Illinois Company at a profit of $15,000. The inventory of Illinois Company on December 31, 2017, included goods purchased from Chicago Company on which Chicago Company recognized a profit of $7,500. During 2018, Chicago Company sold goods to Illinois Company for $375,000, of which $60,000 was unpaid on December 31, 2018. The December 31, 2018, inventory of Illinois Company included goods acquired from Chicago Company on which Chicago Company recognized a profit of $10,500.