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 $28 per share. Michael Company 12/31/18 $ (644,500) Aaron Company 12/31/18 $ (484,500) Revenues Cost of goods sold Amortization expense Dividend income 287,250 129,300 5.000 197,250 90,000 $ (232,950) $ (1,046,000) (232,950) Net income $ (197,250) Retained earnings, 1/1/18 Net income (above) Dividends declared $ (668, 000) (197,250) 90,000 5,000 Retained earnings, 12/31/18 $ (1,188,950) $ (860,250) Cash Receivables Inventory Investment in Aaron Company Copyrights Royalty agreements $140,000 20,500 257,000 325,000 429,000 611,000 570,000 512,000 1,015,000 $ 3,277,000 437,000 456,000 $1,495,500 $ (505,250) Total assets $ (988, 050) Liabilities Preferred stock Common stock Additional paid-in capital Retained earnings, 12/31/18 (300,000) (500,000) (300,000) (100,000) (30,000) 860,250) 1,188,950 Total 1iabilities and equity $ (3,277,000) $ (1,495,500)