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This is all the information provided in the problem. I need HELP! Following are separate f indicated by parentheses) own statements of Michael Company and
This is all the information provided in the problem. I need HELP!
Following are separate f indicated by parentheses) own statements of Michael Company and Aaron Company as of December 31, 2018 (credit balances Michael acquired all of Aaron's outstanding voting stock on January 1. 2014, by issuing 20,000 shares of ts $1 par common stock. On thre acquisition date, Michael Company's stock actively traded at $36 per share. Michael c 12/31/18 12/31/18 s (742,000) Revenues Cost of goods sold Amortization expense Dividend income (406, 500) 158,250 93,000 336,000 133, 200 (277, 800) (277, 800) (5, 000) Net income Retained earnings, 1/1/18 Net income (above) Dividends declared $ (155,250) $(797,000) (155,250) $ (926,000) 90,000 5, 000 Retained earnings, 12/31/18 s (1,113, Bo0) S (947,250) 149,000 457,000 657,000 720,000 522,000 982,000 Receivables Inventory 16, 400 295, 000 371,000 t in Aaron Company 388, 000 448, 000 $ 1,518, 400 (441,150) Copyrights Royalty agreements s 3, 487, 000 (1,273,200) Total assets Liabilities Preterred stock Common stock Additional paid-in capital Retained earnings, 12/31/18 (100,000) (30,000) (1,113,800)(947,250) $ (1,518,400) (300,000) 500,000) (300,000) Total 1iabilities and equity s (3, 487, 000) On the date of acquisition, Aaron reported retained earnings of $480,000 and a total book value of $610,000. At that time, its royalty agreements were undervalued by $60,000. This intangible was assumed to have a six-year remaining life with no residual value. Additionally, Aaron owned a trademark with a fair value of $50,000 and a 10-year remaining life that was not reflected on its books Aaron declared and paid dividends in the same periodStep by Step Solution
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