Following are separate financial statements of Michael Company and Aaron Company as of December 31, 2021 (credit balances indicated by parentheses). Michael acquired all of Aaron's outstanding voting stock on January 1, 2017, by issuing 20,000 shares of its own S1 par common stock. On the acquisition date, Michael Company's stock actively traded at $34.50 per share. Revenues Cost of goods sold Amortization expense Dividend income Net Income Retained earningo, 1/1/21 Net Income (above) Dividends declared Retained earnings, 12/31/21 Canh Receivables Inventory Investment in Aaron Company Copyright loyalty agreements Total assets Liabilities Preferred stock Common stock Additional paid in capital Retained earningo, 12/31/21 Total liabilities and equity Michael Company 12/31/21 5 (635,500) 282,750 131,100 3,000) $ (226,650) 5 (890,000) (226,650) 90,000 5(1,026,650) 5 139,000 397,000 576.000 690,000 471.000 920,000 ).197.000 171.070, 3507 (300,000) (500,000) (300,000) (1.026,650) 53,197.000) Aaron Company 12/31/21 5 (469,500) 189.750 121,000 0 5 (158,750) (795,000) (158,750) 3,000 $ (948,750) 5 16,000 271,000 376.000 . 420,000 441.000 $1,530,000 # 450,050) . 1100.000) (30,000) 1940,750) ${1,538,800) On the date of acquisition, Aaron reported retained earnings of $450,000 and a total book value of $580,000. 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, 2021. b. Assuming that Michael applied the equity method to this investment, what would the following account balances be on the parent's individual financial statements? Complete this question by entering your answers in the tabs below. Required A Required B ances Using the preceding information, prepare a consolidation worksheet for these two companies as of December 31, 2021. (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. Inppe all amounts as positive values.) Show less Consolidated Total Credit Accounts Revenues Cost of goods sold Amortization expense Dividend income Net income MICHAEL COMPANY AND CONSOLIDATED SUBSIDIARY Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Michael Aaron Debit $ 16.35,600) $ (469.500) 282.750 189,750 131,100 121,000 (5,000) 0 $ (226.650) 5 (158,750) Retained earning, 1/1/21 (Michael Raminar an 1121 (Aal (890,000) 0 1795 $ Revenues Cost of goods sold Amortization expense Dividend income Net income (635,500) $ 282,750 131,100 (5,000) (226,650) $ (469,500) 189,750 121,000 0 $ (158,750) 0 Retained earning, 1/1/21 (Michael) Retained earning, 1/1/21 (Aaron) Net Income (above) Dividends declared Retained earnings, 12/31/21 (890,000) 0 (226,650) 90,000 (1,026,650) $ (795,000) (158,750) 5,000 (948,750) $ $ Cash Receivables Inventory Investment in Aaron Co. Copyrights Royalty agreements Trademark 139,000 $ 397,000 576.000 690,000 416,800 271,000 376,000 01 428,000 447,000 0 1,538,800 471,000 924,000 0 Total assets $ 3,197,000 $ $ Llabilities Preferred stock Common stock Additional paid-in capital Retained earnings, 12/31/21 (above) Total liabilities and equity (1,070,350) $ (300,000) (500,000) (300,000) (1,026,650) (3.197,000) $ (460,050) 0 (100,000) (30,000) (948,750) (1.538,800) $ Complete this question by entering your answers in the tabs below. Required A Required B Assuming that Michael applied the equity method to this investment, what would the following account balances be on the parent's Individual financial statements? Amounts Equity in Earnings of Aaron 12/31/21 Retained earningo, 1/1/21 Investment in Aaron 12/31/21 Retained earnings, 12/31/21