Giant acquired all of Small’s common stock on January 1, 2014, in exch

Giant acquired all of Small’s common stock on January 1, 2014, in exchange for cash of $770,000. On that day, Small reported common stock of $170,000 and retained earnings of $400,000. At the acquisition date, $42,500 of the fair-value price was attributed to undervalued land while $96,000 was assigned to undervalued equipment having a 10-year remaining life. The $61,500 unallocated portion of the acquisition-date excess fair value over book value was viewed as goodwill. Over the next few years, Giant applied the equity method to the recording of this investment. Following are individual financial statements for the year ending December 31, 2018. On that date, Small owes Giant $12,100. Small declared and paid dividends in the same period. Credits are indicated by parentheses. GiantSmallRevenues$(1,324,600)$(473,000)Cost of goods sold631,000122,000Depreciation expense200,000178,000Equity in income of Small(163,400)0Net income$(657,000)$(173,000)Retained earnings, 1/1/18$(1,460,000)$(639,000)Net income (above)(657,000)(173,000)Dividends declared320,000120,000Retained earnings, 12/31/18$(1,797,000)$(692,000)Current assets$298,000$164,000Investment in Small1,014,0000Land502,000263,000Buildings (net)401,000489,000Equipment (net)738,000352,000Goodwill00Total assets$2,953,000$1,268,000Liabilities$(906,000)$(406,000)Common stock(250,000)(170,000)Retained earnings(above)(1,797,000)(692,000)Total liabilities and equities$(2,953,000)$(1,268,000)Answer

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