On January 1, 2020, Parent Inc. acquired 75% of the common shares of Sub Ltd. in exchange for a new issue of its own shares valued at $3,900,000. At that date the shareholders' equity section of Sub Ltd.'s balance sheet was as follows: Preferred shares Common shares Retained earnings Total shareholders' equity $ 750,000 3,000,000 1,350,000 $5,100,000 (Any acquisition differential was allocated to goodwill, none of which was considered impaired in 2020.) Parent reports the noncontrolling interest in Sub in its consolidated balance sheet based on the fair value of the subsidiary at acquisition, proportionate to the price paid by Parent for its controlling interest. The preference shares were cumulative and non-participating with a dividend rate of 10% per year and were redeemable at 1.15. Dividends were last declared and paid in 2017. During 2020, Parent Ltd. had a net income of $1,800,000 and paid dividends of $700,000. Sub Ltd. had a net income of $500,000 and paid dividends of $250,000. The only transaction between the two companies was the sale of a parcel of land from Sub to Parent. The land was sold for $480,000 and had cost Sub $350,000 when originally purchased. The gain was taxable at the capital gains rate of 30%. Assume Parent Ltd. does not own any of the preferred shares of Sub Ltd.