23. Allison Corporation acquired all of the outstanding voting stock of Mathias, Inc., on January 1, 2020, in exchange for $5,875,000 in cash. Allison intends to maintain Mathias as a wholly owned subsidiary. Both companies have December 31 fiscal year-ends. At the acquisition date, Mathias's stockholders' equity was $2,000,000 including retained earnings of $1,500,000. At the acquisition date, Allison prepared the following fair-value allocation schedule for its newly acquired subsidiary: Consideration transferred Mathias stockholders' equity Excess fair over book value to unpatented technology (8-year remaining life). to patents (10-year remaining life).. to increase long-term debt (undervalued, 5-year remaining life) Goodwill.. $ 800,000 2,500,000 (100,000) $5,875,000 2,000,000 $3,875,000 3,200,000 $ 675,000 Postacquisition, Allison employs the equity method to account for its investment in Mathias. During the two years following the business combination, Mathias reports the following income and dividends: 2020 2021 Income $480,000 960,000 Dividends $25,000 50,000 No asset impairments have occurred since the acquisition date. Individual financial statements for each company as of December 31, 2021, follow. Parentheses indicate credit balances. Dividends declared were paid in the same period. Income Statement Sales Cost of goods sold Allison Mathias (6,400,000) (3,900,000) 4,500,000 2,500,000 Depreciation expense 875,000 277,000. Amortization expense 430,000 103,000 Interest expense 55,000 60,000 Equity earnings in Mathias (630,000) -0- Net income (1.170,000) (960,000) Statement of Retained Earnings Retained earnings 1/1 (5,340,000) (1,955,000) Net income (above) (1,170,000) (960,000) Dividends declared 560,000 50,000 Retained earnings 12/31 (5,950,000) (2,865,000) Balance Sheet Cash 75,000 143,000 Accounts receivable 950,000 225,000 Inventories 1,700,000 785,000 Investment in Mathias 6,580,000 -0- Equipment (net) 3,700,000 2,052,000 Patents 95,000 -0- Unpatented technology 2,125,000 1,450,000 Goodwill 425,000 -0- Total assets 15,650,000 4,655,000 Accounts payable (500,000) (90,000) Long-term debt Common stock (1,000,000) (1,200,000) (8,200,000) (500,000) Retained earnings 12/31 Total liabilities and equity (5,950,000) (2,865,000) (15,650,000) (4,655,000) Required: a. Show how Allison determined its December 31, 2021, Investment in Mathias balance. b. Prepare a worksheet to determine the consolidated values to be reported on Allison's financial statements.