Parent Company acquired 100 percent of Subsidiary's outstanding stock for $3,262,500 cash on January 1, 2018. At the date of acquisition, Subsidiary's balance sheet was as follows Cash Receivables Inventory Land Equipment (net) Software Liabilities Common Stock Retained Earnings 83,250 184,500 335,250 202,500 506,250 708,750 949,500) (787,500) (283,500) Certain assets and liabilities had fair values that differed from their book values. The fair values of these were as follows (note: this is not the difference between fair value and book value; this is the fair value) Land Brand Name (indefinite life) Software (2 year life) IP R&D 180,000 135,000 933,750 675,000 Other relevant information . Parent's 1/1/2019 retained earnings balance (excluding the effect of any 2018 subsidiary transactions/income) was $2,092,500 . The subsidiary had net income of $168,750 and paid no dividends in 2018 . The Parent initially expected Subsidiary's in-process research and development would provide future benefits; however, at the end of 2018, Parent determined that the project was not going to be successful, nor provide any future benefits. Parent recorded the appropriate entry in 2018 There are no intercompany payables/receivables between Parent and Subsidiary The companies' 12/31/2019 trial balances are as follows: . . Parent Company acquired 100 percent of Subsidiary's outstanding stock for $3,262,500 cash on January 1, 2018. At the date of acquisition, Subsidiary's balance sheet was as follows Cash Receivables Inventory Land Equipment (net) Software Liabilities Common Stock Retained Earnings 83,250 184,500 335,250 202,500 506,250 708,750 949,500) (787,500) (283,500) Certain assets and liabilities had fair values that differed from their book values. The fair values of these were as follows (note: this is not the difference between fair value and book value; this is the fair value) Land Brand Name (indefinite life) Software (2 year life) IP R&D 180,000 135,000 933,750 675,000 Other relevant information . Parent's 1/1/2019 retained earnings balance (excluding the effect of any 2018 subsidiary transactions/income) was $2,092,500 . The subsidiary had net income of $168,750 and paid no dividends in 2018 . The Parent initially expected Subsidiary's in-process research and development would provide future benefits; however, at the end of 2018, Parent determined that the project was not going to be successful, nor provide any future benefits. Parent recorded the appropriate entry in 2018 There are no intercompany payables/receivables between Parent and Subsidiary The companies' 12/31/2019 trial balances are as follows