Following are selected account balances from Peregrine Company and Sprano Corporation as of December 31, 2021: Peregrine Sprano Revenues Cost of goods sold Depreciation expense Equity Income in Sprano $ (700,000) S (400,000) 250,000 100,000 150,000 200,000 ??? Retained earnings, 1/1/21 (600,000) (200,000) Dividends declared 80,000 60,000 Current assets 400,000 500,000 Copyrights Royalty agreements Investment in Sprano Liabilities 900,000 400,000 600,000 1,000,000 ??? (950,000) (1,380,000) Common Stock ($20 par) Additional paid-in capital (600,000) (200,000) (150,000) (80,000) On January 1, 2021, Peregrine acquired all of Sprano's outstanding stock for $680,000 fair value in cash and common stock. At the date of acquisition, copyrights (with a 6-year remaining life) were undervalued by $120,000 (i.e., market value was higher than book value). Peregrine applies the equity method to maintain the Investment in Sprano account.