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 $32 per share. 12/31/18 12/31/18 Cost of goods sold Amortization expense Dividend income (688,000) 309,000 119,400 (417,000) 163,500 91,000 5,000 Net income $(162,500) $(711,000) (162,500) (264,600) Retained earnings, 1/1/18 $ (1,040,000) (264,600) Dividends declared 90.0003/000 $ (1,214, 600) $154,000 Retained earnings, 12/31/18 $ (868,500) $17,100 247,000 312,000 Receivables Inventory Investment in Aaron Company Copyrights Royalty agreements 455,000 597,000 640,000 519,000 944.000 407,000 382,000 Total assets $ 3,309,0 $1,365,100 Liabilities Preferred stock Common stock Additional paid-in capital Retained earnings, 12/31/18 $ (994,400) (366,600) (300,000) (500,000) (300,000) (100,000) (30,000) 868,500 1,214,600 Total liabilities and equity $(3,309,000) $(1,365,100) On the date of acquisition, Aaron reported retained earnings of $400,000 and a total book value of $530,000. At that time, its royalty agreements were undervalued by $60,000. This intangible was assumed to have a six-year remaining life with no residual value. Additionally, Aaron owned a trademark with a fair value of $50,000 and a 10-year remaining life that was not reflected on its books. Aaron declared and paid dividends in the same period. a. Using the preceding information, prepare a consolidation worksheet for these two companies as of December 31, 2018. b. Assuming that Michael applied the equity method to this investment, what account balances would differ on the parent's individuel financial statements