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Following are separate financial statements of Michael Company and Aaron Company as of December $31,2024($credit balances indicated by parentheses$).$ Michael acquired all of Aaron$$s outstanding voting stock on January $1,2020,$ by issuing $20,000$ shares of its own $$1$ par common stock. On the acquisition date, Michael Company$$s stock actively traded at $$36\mathrm{.}00$ per share.

Accounts Michael Company $12/31/24$ Aaron Company $12/31/24$

Revenues $ $(742,000)$ $ $(406,500)$

Cost of goods sold $336,000158,250$

Amortization expense $133,20093,000$

Dividend income $(5,000)0$

Net income $ $(277,800)$ $ $(155,250)$

Retained earnings, $1/1/24$ $ $(926,000)$ $ $(797,000)$

Net income $($above$)(277,800)(155,250)$

Dividends declared $90,0005,000$

Retained earnings, $12/31/24$ $ $(1,113,800)$ $ $(947,250)$

Cash $ $149,000$ $ $16,400$

Receivables $457,000295,000$

Inventory $657,000371,000$

Investment in Aaron Company $720,0000$

Copyrights $522,000388,000$

Royalty agreements $982,000448,000$

Total assets $ $3,487,000$ $ $1,518,400$

Liabilities $ $(1,273,200)$ $ $(441,150)$

Preferred stock $(300,000)0$

Common stock $(500,000)(100,000)$

Additional paid$-$in capital $(300,000)(30,000)$

Retained earnings, $12/31/24(1,113,800)(947,250)$

Total liabilities and equity $ $(3,487,000)$ $ $(1,518,400)$

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 period.

Required:

Using the preceding information, prepare a consolidation worksheet for these two companies as of December $31,2024.$

Assuming that Michael applied the equity method to this investment, what would the Equity in Subsidiary Earnings, Retained Earnings, and Investment account balances be on the parent's individual financial statements?

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