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 $24 per share. Aaron Company 12/31/18 $ 1417.000) 163,500 88.000 $ $ Michael Company 12/31/18 S 1742.000) 336,000 142.500 (5,000) $ (268,500) (934, 000) (268,500) 90,000 $(1,112,500) 208.000 390,000 656,000 480,000 555.000 1,011.000 $ 3,300,000 $(1,087,500) 1300,000) (500,000 (300,000) (1, 112,500) $ (3,300,000) Revenues Cost of goods sold Amortization expense Dividend income Net income Retained earnings, 1/1/18 Net income (above) Dividends declared Retained earnings, 12/31/18 Cash Receivables Inventory Investment in Aaron Company Copyrights Royalty agreements Total assets Liabilities Preferred stock Common stock Additional paid-in capital Retained earnings, 12731/18 Total liabilities and equity (165,500) (549,000) (165,500) 5,000 (709,500) 24,100 307,000 354,000 $ $ 403,000 471,000 $ 1,559, 100 $ (719,600) (100,000) 130,000) (709,500) $(1,559, 100) On the date of acquisition, Aaron reported retained earnings of $240,000 and a total book value of $370,000. 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. ceding 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 Individual financial statements? Using the preceding information, prepare a consolidation worksheet for these two companies as of December 31, 2018. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Amounts in the Debit and Credit columns should be entered as positive. Negative amounts for the Consolidated Totals column should be entered with a minus sign.) Show less MICHAEL COMPANY AND CONSOLIDATED SUBSIDIARY Consolidation Worksheet For Year Ending December 31, 2018 Consolidation Entries Michael Aaron Debit Credit $ (742,000) $ (417,000) 336,000 163,5001 142,500 88,000 (5,000) $ (268,500) $ (165,500) Consolidated Totals Accounts Revenues Cost of goods sold Amortization expense Dividend income Net income (934,000) Retained eamings. 1/1 (Michael) Retained eamings, 1/1 (Aaron) Net income (above) Dividends declared Retained earings, 12/31 0 (268,500) 90,000 (1,112,500) (549,000) (165,500) 5,000| (709,500) | $ $ $ $ 24,1001 307.000 354,000 Cash Receivables Inventory Investment in Aaron Co. Copyrights Royalty agreements Trademark Total assets 200,000 390,000 656,000 480,000 555,000 1,011,000 0 3,300,000 403,000 471,000+ of 1,559,100 $ $ $ $ (719,600) Liabilities Preferred stock Common stock Additional paid-in capital Retained earnings, 12/31 (above) Total liabilities and equity (1.067,500) (300,000) (500,000) (300,000) (1.112.500) (3,300,000) (100,000) (30,000) (709,500) (1,559,100) $ $ Assuming that Michael applied the equity method to this investment, what account balances would differ on the parent's individual financial statements