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 $24 per share). As of that date, Bradford had stockholders equity totaling $190,200. Land shown on Bradfords accounting records was undervalued by $16,500. Equipment (with a five-year remaining life) was undervalued by $8,500. A secret formula developed by Bradford was appraised at $24,800 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	$	(581,000	)		$	(276,250	)
Cost of goods sold		192,000				104,500
Depreciation expense		172,500				78,000
Subsidiary earnings		(90,810	)			0
Net income	$	(307,310	)		$	(93,750	)
Retained earnings, 1/1/18	$	(804,000	)		$	(105,900	)
Net income (above)		(307,310	)			(93,750	)
Dividends declared		175,500				40,000
Retained earnings ,12/31/18	$	(935,810	)		$	(159,650	)
Current assets	$	302,000			$	95,000
Investment in Bradford		259,750				0
Company
Land		602,000				87,600
Buildings and equipment (net)		728,000				248,000
Total assets	$	1,891,750			$	430,600
Current liabilities	$	(265,940	)		$	(205,950	)
Common stock		(600,000	)			(60,000	)
Additional paid-in capital		(90,000	)			(5,000	)
Retained earnings, 12/31/18		(935,810	)			(159,650	)
Total liabilities and equity	$	(1,891,750	)		$	(430,600	)

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

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

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