Allen Company acquired 100 percent of Bradford Companys voting stock on January 1, 2017, by issuing 10,000 shares of its $10 par value common stock (having a fair value of $18.00 per share). As of that date, Bradford had stockholders equity totaling $126,000. Land shown on Bradfords accounting records was undervalued by $11,800. Equipment (with a five-year remaining life) was undervalued by $8,400. A secret formula developed by Bradford was appraised at $33,800 with an estimated life of 20 years.

The following are the separate financial statements for the two companies for the year ending December 31, 2021. There were no intra-entity payables on that date. Credit balances are indicated by parentheses.

	Allen Company				Bradford Company
Revenues	$	(539,000	)		$	(248,750	)
Cost of goods sold		178,000				93,500
Depreciation expense		175,500				79,500
Subsidiary earnings		(72,380	)			0
Net income	$	(257,880	)		$	(75,750	)
Retained earnings, 1/1/21	$	(754,000	)		$	(103,500	)
Net income (above)		(257,880	)			(75,750	)
Dividends declared		175,500				40,000
Retained earnings ,12/31/21	$	(836,380	)		$	(139,250	)
Current assets	$	304,000			$	85,000
Investment in Bradford		241,400				0
Company
Land		570,000				80,100
Buildings and equipment (net)		830,000				244,000
Total assets	$	1,945,400			$	409,100
Current liabilities	$	(419,020	)		$	(204,850	)
Common stock		(600,000	)			(60,000	)
Additional paid-in capital		(90,000	)			(5,000	)
Retained earnings, 12/31/21		(836,380	)			(139,250	)
Total liabilities and equity	$	(1,945,400	)		$	(409,100	)

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

2. a-2. Complete the table to show the computation for Subsidiary Earnings.

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. Req A1 Req A2 Req 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 Req A1 Req A2 > Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Complete the table to show the computation for Subsidiary Earnings. (Negative amounts should be indicated by a minus sign.) Amounts Equity earnings $ 0 Req A1 Req B ALLEN AND SUBSIDIARY Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Accounts Allen Co. Bradford Co. Debit Credit Consolidated Totals Income Statement Revenues $ $ (539,000) 178,000 175,500 (248,750) 93,500 79,500 Cost of goods sold Depreciation expense Amortization expense Equity in subsidiary earnings 0 0 0 (72,380) (257,880) Net income $ $ (75,750) Statement of Retained Earnings Retained earnings 1/1 Net income (above) Dividends declared Retained earnings 12/31 (754,000) (257,880) 175,500 (836,380) (103,500) (75,750) 40,000 (139,250) $ $ Balance Sheet Current assets $ 304,000 $ 85,000 Investment in Bradford Co. 241,400 0 Land 80,100 570,000 830,000 244,000 Buildings and equipment (net) Formula 0 0 Total assets $ 1,945,400 $ 409,100 Current liabilities Common stock Additional paid-in capital Retained earnings 12/31 Total liabilities and equity (419,020) (600,000) (90,000) (836,380) $ (1,945,400) (204,850) (60,000) (5,000) (139,250) (409,100) $ $ 0 $ 0