On January 1, 2018, Brooks Corporation exchanged $1,108,500 fair-value consideration for all of the outstanding voting stock of Chandler, Inc. At the acquisition date, Chandler had a book value equal to $1,072,500. Chandler's individual assets and liabilities had fair values equal to their respective book values except for the patented technology account, which was undervalued by $180,000 with an estimated remaining life of six years. The Chandler acquisition was Brooks's only business combiation for the year In case expected synergies did not materialize, Brooks Corporation wished to prepare for a potential future spin-off of Chandler, Inc. Therefore, Brooks had Chandler maintain its separate incorporation and independent accounting information system as elements of continuing value On December 31, 2018, each company submitted the following financial statements for consolidation. Dividends were declared and paid in the same period Brooks Corp. Chandler Inc Income Statement Revenues Cost of goods sold Gain on bargain purchase Depreciation and amortization Equity earnings from Chandler $ (590,000 (641,000) 206,000 245,000 144,000) 145,000 (236,000) 169,000 $ (580,000) (266,000) (1,690,000) (772,500) Net income Statement of Retained Earnings Retained earnings, 1/1 Net income (above) Dividends declared (580,000) 200,000 (266,000) 50,000 $ (2,070,000) (988,500) Retained earnings, 12/31 Balance Sheet Current assets Investment in Chandler Trademarks Patented technology Equipment $ 190,500 1,438,500 124,000 387,000 669,000 2,809,000 $ 374,500 268,000 478,000 350,000 1,470,500 Total assets Liabilities Common stock Retained earnings, 12/31 $ (204,000) (182,000) (300,000) (535,000) (2,070,000)( 988,500 Total liabilities and equity $ (2,809,000) (1,470,500)