On December 31, 2013, Poplar Inc. purchased 80% of the 600,000 outstanding common shares of Spruce Ltd for $5.4 million in cash. On that date, the shareholders' equity of Spruce totalled $6 million and consisted of $1 million in common shares, $1 million in contributed surplus and $4 million in retained earnings. On December 31, 2013, Spruce had a plot of land with a fair value that was $100,000 greater than its carrying value, equipment [with a remaining life of 6 years) with a fair value that was $120,000 greater than its carrying value and longterm debt maturing on December 31, 2021 with a fair value that was $200,000 greater than its book value. Any remaining purchase discrepancy was allocated to goodwill which was assessed annually for impairment. For the year ended December 31, 2019, the condensed income statements for the two companies were as follows: Poplar Inc. Spruce Ltd. Sales and other revenue $ 12,500,000 $ 5,600,000 Cost of goods sold 8,000,000 4,000,000 Amortization expense 1,500,000 1,000,000 Other expenses 1,100,000 1,400,000 income tax expense 700,000 (200,000) Net income oss} $ 1,200,000 $ {600,000} At December 31, 2019, the condensed balance sheets of the two companies were as follows: Poplar Inc. Spruce Ltd. Total assets 5: 29,000,000 $ 11,100,000 Liabilities 5,000,000 1,200,000 Common shares 11,000,000 1,000,000 Contributed surplus 1,100,000 1,000,000 Retained earnings 11,900,000 7,900,000 $ 29,000,000 $ 11,100,000