Allen Company acquired 100 percent of Bradford Company's voting stock on January 1, 2017, by issuing 10,000 shares of its $10 par value common stock (having a fair value of $15.50 per share). As of that date, Bradford had stockholders' equity totaling $112,500. Land shown on Bradford's accounting records was undervalued by $11,500. Equipment (with a five-year remaining life) was undervalued by $9,000. A secret formula developed by Bradford was appraised at $22,000 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. Bradford Company $ (191,250) Allen Company $ (635,000) 210,000 147,750 (44,950) $ (322,200) $ (47,850) 70,500 72,900 0 Revenues Cost of goods sold Depreciation expense Subsidiary earnings Net income Retained earnings, 1/1/21 Net income (above) Dividends declared $ (814,000) (322,200) 175,500 Retained earnings,12/31/21 $ (960,700) Current assets $ Investment in Bradford 432,000 227,750 $ (126,900) (47,850) 40,000 $ (134,750) $ 121,500 0 Company Land Buildings and equipment (net) Total assets Current liabilities Common stock Additional paid-in capital Retained earnings, 12/31/21 Total liabilities and equity 554,000 842,000 $ 2,055,750 $ (405,050) (600,000) (90,000) 78,300 188,000 $ 387,800 $ (188,050) (60,000) (5,000) (134,750) (960,700) $(2,055,750) $ (387,800) a-1. Complete the table to show the allocation of the fair value in excess of book value. a-2. Complete the table to show the computation for Subsidiary Earnings. b. Complete the worksheet by consolidating the financial information for these two companies. Req A1 Req A2 Req B Complete the table to show the allocation of the fair value in excess of book value. Annual Excess Accounts Amount Life Amortizations Land $ 11,500 years Equipment Formula 9,000 22.000 5 years $ 1,800 20 years 1,100 years years Total $ 42,500 S 2,900 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 Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B 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. Input all amounts as positive values.) 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 $ (635,000) $ (191,250) Cost of goods sold 210,000 70,500 Show less Depreciation expense Amortization expense Equity in subsidiary earnings Net income Statement of Retained Earnings 147,750 72,900 0 0 (44,950) 0 $ (322,200) $ (47,850) Retained earnings 1/1 (814,000) (126,900) Net income (above) (322,200) (47,850) Dividends declared 175,500 40,000 Retained earnings 12/31 $ (960,700) $ (134,750) Balance Sheet Current assets $ 432,000 $ 121,500 Investment in Bradford Co. 227,750 0 Land 554,000 78,300 Buildings and equipment (net) 842,000 188,000 Formula 0 0 Total assets $ 2,055,750 $ 387,800 Current liabilities Common stock Additional paid-in capital Retained earnings 12/31 (405,050) (188,050) (600,000) (60,000) (90,000) (960,700) (5,000) (134,750) Total liabilities and equity $ (2,055,750) $ (387,800) $ 0 $ 0