On January 1, 2023, Perlman Corporation exchanged $1,710,000 cash for 90 percent of the outstanding voting stock of Stein Company. The consideration transferred by Perlman provided a reasonable basis for assessing the total January 1, 2023, fair value of Stein Company. At the acquisition date, Stein reported the following owners' equity amounts in its balance sheet: Common Stock $400,000 Additional paid-in capital $60,000 Retained Earnings $265,000 In determining its acquisition offer, Perlman noted that the values for Stein's recorded assets and liabilities approximated their fair values. Perlman also observed that Stein had developed internally a software with an assessed fair value of $800,000 that was not reflected on Stein's books. Perlman expected both cost and revenue synergies from the combination. At the acquisition date, Perlman prepared the following fair-value allocation schedule: Fair value of Stein Company $1,900,000 Book Value of Stein Company $725,000 Excess fair value $1,175,000 To software (10-year remaining life) $800,000 To goodwill $375,000 At December 31, 2024, the two companies report the following balances: Accounts Brooks Corporation Chandler Incorporated Revenues $(1,843,000) $(675,000) Cost of goods sold $1,100,000 $322,000 Depreciation expense $125,000 $120,000 Amortization expense $275,000 $11,000 Interest expense $27,500 $7,000 Equity Earnings from Stein $(121,500) $0 Net