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 $35.50 per share. Aaron Company 12/31/18 $ (478,500) 194,250 119,000 '$ 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, 12/31/18 Total liabilities and equity $ Michael Company 12/31/18 $ (725,500) 327,750 137,700 (5,000) $ (265, 050) $(1,048,000) (265,050) 90,000 $(1,223,050) $ 167,000 402,000 633,000 710,000 16522,000 999,000 $ 3,433,000 $(1,109,950) (300,000) (500,000) (300,000) (1,223,050) $(3,433,000) (165,250) (819,000) (165,250) 5,000 (979,250) 20,680 291,000 342,000 419,000 419,000 $ 1,491,600 $ (382,350) (100, 000) (30,000) (979,250) $(1,491,600) On the date of acquisition, Aaron reported retained earnings of $470,000 and a total book value of $600,000. 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. On the date of acquisition, Aaron reported retained earnings of $470,000 and a total book value of $600,000. 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 individual financial statements? Answer is not complete. 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 account balances would differ on the parent's Individual financial statements? $ 150,250 Equity in Earnings of Aaron Retained Eamings 1/1/18 Investment in Aaron $ 1,337,000 $ 755,450 Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2018: Davis $ (403,800) 141,000 81,000 Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/18 Net income Dividends declared Retained earnings, 12/31/18 Cash and receivables Inventory Investment in Davis Buildings (net) Equipment (net) Total assets Liabilities Common stock Retained earnings, 12/31/18 Total liabilities and stockholders' equity Gibson (782,000) 316,000 241,000 (24,000) $ (249,000) $ (735,000) (249,000) 60,000 $ (924,600) $ 231,850 533,000 618, 150 528,888 463,000 $ 2,374,000 $ (820,000) (630,000) (924,000) $(2,374,000) $ (181,000) $ (486,000) (181,800) 40,000 $ (627,000) $ 77,000 222,000 692,000 487,000 $ 1,478,000 $ (511,000) (340,000) (627,800) $(1,478,000) Gibson acquired 60 percent of Davis on April 1, 2018, for $618,150. On that date, equipment owned by Davis (with a five-year remaining life) was overvalued by $84,000. Also on that date, the fair value of the 40 percent noncontrolling interest was $412,100. Davis earned income evenly during the year but declared the $40,000 dividend on November 2018 a. Prepare a consolidated income statement for the year ending December 31, 2018 b. Determine the consolidated balance for each of the following accounts as of December 31, 2018: Goodwill Equipment (net) Common stock Buildings (net) Dividends declared Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Prepare a consolidated Income statement for the year ending December 31, 2018. (Enter all amounts as positive values.) $ 1,084,250 Consolidated Income Statement For the Year Ending December 31, 2018 Revenues Cost of goods sold $ 421,750 Operating expenses Consolidated net income Net income attributable to noncontrolling interest Net income to Gibson Company 421,750 662,500 $ 662,500 Required > Goodwill Equipment (net) Common stock Buildings (net) Dividends declared Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Determine the consolidated balance for each of the following accounts as of December 31, 2018: Goodwill Equipment (net) Common stock Buildings (net) Dividends declared