Allen Company acquired 100 percent of Bradford Companys voting stock on January 1, 2014, by issuing 10,000 shares of its $10 par value common stock (having a fair value of $21 per share). As of that date, Bradford had stockholders equity totaling $164,550. Land shown on Bradfords accounting records was undervalued by $17,400. Equipment (with a five-year remaining life) was undervalued by $6,250. A secret formula developed by Bradford was appraised at $21,800 with an estimated life of 20 years.

Following are the separate financial statements for the two companies for the year ending December 31, 2018. There were no intra-entity payables on that date. Credit balances are indicated by parentheses.

	Allen Company				Bradford Company
Revenues	$	(728,000	)		$	(298,750	)
Cost of goods sold		241,000				113,500
Depreciation expense		150,000				53,400
Subsidiary earnings		(129,510	)			0
Net income	$	(466,510	)		$	(131,850	)
Retained earnings, 1/1/18	$	(680,000	)		$	(104,400	)
Net income (above)		(466,510	)			(131,850	)
Dividends declared		175,500				40,000
Retained earnings ,12/31/18	$	(971,010	)		$	(196,250	)
Current assets	$	334,000			$	102,000
Investment in Bradford		295,000				0
Company
Land		484,000				65,700
Buildings and equipment (net)		724,000				165,000
Total assets	$	1,837,000			$	332,700
Current liabilities	$	(175,990	)		$	(71,450	)
Common stock		(600,000	)			(60,000	)
Additional paid-in capital		(90,000	)			(5,000	)
Retained earnings, 12/31/18		(971,010	)			(196,250	)
Total liabilities and equity	$	(1,837,000	)		$	(332,700	)

1. a-1. Complete the table to show the allocation of the fair value in excess of book value. Complete the table to show the allocation of the fair value in excess of book value.

current amount life annual excess amortization

1. a-2. What balance will Allen show in its Subsidiary Earnings account?

What balance will Allen show in its Subsidiary Earnings account?

Equity earnign total

1. b. Complete the worksheet by consolidating the financial information for these two companies.

Complete the worksheet by consolidating the financial information for these two companies. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Amounts in the Debit and Credit columns should be entered as positive. Negative amounts for the Consolidated Totals column should be entered with a minus sign.)