On January 1, 2023, Palo Verde Corporation acquired 100 percent of the voting stock of Silverstone Corporation in exchange for $2,220,500 in cash and securities. On the acquisition date, Silverstone had the following balance sheet:

Cash	$ 30,400	Accounts payable	$ 1,306,400
Accounts receivable	89,000
Inventory	149,000
Equipment (net)	1,690,000	Common stock	800,000
Trademarks	946,000	Retained earnings	798,000
Total assets	$ 2,904,400	Total liabilities and equity	$ 2,904,400

At the acquisition date, the book values of Silverstones assets and liabilities were generally equivalent to their fair values except for the following assets:

Asset	Book Value	Fair Value	Remaining Useful Life
Equipment	$ 1,690,000	$ 1,813,000	8 years
Royalty agreements	0	170,000	4 years
Trademarks	946,000	1,033,500	indefinite

During the next two years, Silverstone has the following income and dividends in its own separately prepared financial reports to its parent.

Year	Net Income	Dividends
2023	$ 191,000	$ 25,000
2024	411,000	45,000

Dividends are declared and paid in the same period. The December 31, 2024, separate financial statements for each company follow. Parentheses indicate credit balances.

Items	Palo Verde	Silverstone
Income Statement
Revenues	$ (5,540,000)	$ (2,757,000)
Cost of goods sold	2,970,000	1,910,000
Depreciation expense	559,000	436,000
Amortization expense	137,000	0
Equity earnings in Silverstone	(353,125)	0
Net income	$ (2,227,125)	$ (411,000)
Statement of Retained Earnings
Retained earnings, 1/1	$ (3,800,000)	$ (964,000)
Net income (above)	(2,227,125)	(411,000)
Dividends declared	150,000	45,000
Retained earnings, 12/31	$ (5,877,125)	$ (1,330,000)
Balance Sheet
Cash	$ 558,000	$ 55,000
Accounts receivable	770,000	122,000
Inventory	965,000	512,000
Investment in Silverstone	2,636,750	0
Equipment	6,260,000	1,725,000
Royalty agreements	141,000	0
Trademarks	3,280,000	938,000
Goodwill	256,000	0
Total assets	$ 14,866,750	$ 3,352,000
Accounts payable	$ (489,625)	$ (1,222,000)
Common stock	(8,500,000)	(800,000)
Retained earnings, 12/31	(5,877,125)	(1,330,000)
Total liabilities and equity	$ (14,866,750)	$ (3,352,000)

Required:

Determine the fair value in excess of book value for Palo Verdes acquisition date investment in Silverstone.

Determine Palo Verde's December 31, 2024, Investment in Silverstone balance.

Prepare a worksheet to determine the balances for Palo Verde's December 31, 2024, consolidated financial statements.