On January 1, 2018, Access IT Company exchanged $1,000,000 for 40 percent of the outstanding voting stock of Net Connect. Especially attractive to Access IT was a research project underway at Net Connect that would enhance both the speed and quantity of client-accessible data. Although not recorded in Net Connect's financial records, the fair value of the research project was considered to be $1,960,000 In contractual agreements with the sole owner of the remaining 60 percent of Net Connect, Access IT was granted (1) various decision- making rights over Net Connect's operating decisions and (2) special service purchase provisions at below-market rates. As a result of these contractual agreements, Access IT established itself as the primary beneficiary of Net Connect. Immediately after the purchase, Access IT and Net Connect presented the following balance sheets Access IT 61,000 1,000,000 981,000 1,066,000 916,000 Net Connect Cash Investment in Net Connect Capitalized software Computer equipment Communications equipment Patent Total assets 41,000 156,000 56,000 336,000 191,000 $ 780,000 $4,024,000 Long-term debt Common stock-Access IT Common stock-Net Connect Retained earnings $ (941,000) (616,000) (41,000) $ (780,000) (2,660,000) (423,000)(123,000 (4,024,000) Total liabilities and equity