The financial statements of Post Company and Stamp Company on December 31, Year 5, were as follows: BALANCE SHEETS Assets Post Stamp Cash $ 50,000 $ 10,000 Accounts receivable. 250,000 100,000 Inventories 3,000,000 520,000 Equipment (net) 6,150,000 2,500,000 Buildings (net) 2,600,000 500,000 Investment in Stamp (at cost) 850,000 $12,900,000 $3,630,000 Liabilities and Shareholders' Equity Current liabilities $ 300,000 $ 170,000 Long-term liabilities 4,000,000 1,100,000 Common shares 3,000,000 500,000 Retained earnings 5,600,000 1,860,000 $12,900,000 $3,630,000