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 $16 per share). As of that date, Bradford had stockholders equity totaling $109,800. Land shown on Bradfords accounting records was undervalued by $19,700. Equipment (with a five-year remaining life) was undervalued by $7,300. A secret formula developed by Bradford was appraised at $23,200 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	$	(647,000	)		$	(268,750	)
Cost of goods sold		214,000				101,500
Depreciation expense		150,750				73,200
Subsidiary earnings		(91,430	)			0
Net income	$	(373,680	)		$	(94,050	)
Retained earnings, 1/1/18	$	(746,000	)		$	(110,400	)
Net income (above)		(373,680	)			(94,050	)
Dividends declared		175,500				40,000
Retained earnings ,12/31/18	$	(944,180	)		$	(164,450	)
Current assets	$	344,000			$	106,000
Investment in Bradford		266,550				0
Company
Land		586,000				65,700
Buildings and equipment (net)		882,000				207,000
Total assets	$	2,078,550			$	378,700
Current liabilities	$	(444,370	)		$	(149,250	)
Common stock		(600,000	)			(60,000	)
Additional paid-in capital		(90,000	)			(5,000	)
Retained earnings, 12/31/18		(944,180	)			(164,450	)
Total liabilities and equity	$	(2,078,550	)		$	(378,700	)

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

Complete this question by entering your answers in the tabs below. Required A1 Required A2 Required B Complete the table to show the allocation of the fair value in excess of book value. Accounts Amount Life Annual Excess Amortizations years years years years years Total $ 0 $ 0 Complete this question by entering your answers in the tabs below. Required A1 Required A2 Required B What balance will Allen show in its Subsidiary Earnings account? Equity earnings $ ALLEN AND SUBSIDIARY Consolidation Worksheet For Year Ending December 31, 2018 Consolidation Entries Accounts Allen Co. Bradford Co. Debit Credit Consolidated Totals $ Income Statement Revenues Cost of goods sold Depreciation expense Amortization expense Equity in subsidiary earnings Net income (647,000) $ 214,000 150,750 (268,750) 101,500 73,200 0 0 0 (91,430) (373,680) $ $ (94,050) $ 0 Statement of Retained Earnings Retained earnings 1/1 Net income (above) Dividends declared Retained earnings 12/31 0 (746,000) (373,680) 175,500 (944,180) $ (110,400) (94,050) 40,000 (164,450) $ $ Balance Sheet Current assets $ 344,000 $ 106,000 Pradford Co OCCO