Following are separate financial statements of Michael Company and Aaron Company as of December $31,2024($credit balances indicated by parentheses$).$ Michael acquired all of Aaron$$s outstanding voting stock on January $1,2020,$ by issuing $20,000$ shares of its own $$1$ par common stock. On the acquisition date, Michael Company$$s stock actively traded at $$32\mathrm{.}50$ per share.

Accounts Michael Company $12/31/24$ Aaron Company $12/31/24$

Revenues $ $(689,500)$ $ $(418,500)$

Cost of goods sold $309,750164,250$

Amortization expense $119,700101,500$

Dividend income $(5,000)0$

Net income $ $(265,050)$ $ $(152,750)$

Retained earnings, $1/1/24$ $ $(1,002,000)$ $ $(730,000)$

Net income $($above$)(265,050)(152,750)$

Dividends declared $90,0005,000$

Retained earnings, $12/31/24$ $ $(1,177,050)$ $ $(877,750)$

Cash $ $192,000$ $ $19,100$

Receivables $447,000231,000$

Inventory $642,000365,000$

Investment in Aaron Company $650,0000$

Copyrights $545,000387,000$

Royalty agreements $1,001,000416,000$

Total assets $ $3,477,000$ $ $1,418,100$

Liabilities $ $(1,199,950)$ $ $(410,350)$

Preferred stock $(300,000)0$

Common stock $(500,000)(100,000)$

Additional paid$-$in capital $(300,000)(30,000)$

Retained earnings, $12/31/24(1,177,050)(877,750)$

Total liabilities and equity $ $(3,477,000)$ $ $(1,418,100)$

On the date of acquisition, Aaron reported retained earnings of $$410,000$ and a total book value of $$540,000.$ 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.

Required:

a$.$ Using the preceding information, prepare a consolidation worksheet for these two companies as of December $31,2024.$

b$.$ Assuming that Michael applied the equity method to this investment, what would the Equity in Subsidiary Earnings, Retained Earnings, and Investment account balances be on the parent's individual financial statements?