Allen Company acquired 100 percent of Bradford Company's voting stock on January 1, 2014, by issuing 10,000 shares of its $10 par value common stock (having a fair value of $23 per share). As of that date, Bradford had stockholders' equity totaling $187,900. Land shown on Bradford's accounting records was undervalued by $14,400. Equipment (with a five-year remaining life) was undervalued by $5,300. A secret formula developed by Bradford was appraised at $22,400 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. Revenues Cost of goods sold Depreciation expense Subsidiary earnings Net income Retained earnings, 1/1/18 Net income (above) Dividends declared Retained earnings ,12/31/18 Current assets Investment in Bradford Company Land Buildings and equipment (net) Total assets Current liabilities Common stock Additional paid-in capital Retained earnings, 12/31/18 Total liabilities and equity Allen Company $ (572,000) 189,000 176, 250 (104,920) $ (311,670) $ (770,000) (311,670) 175,500 $ (906,170) $ 368,000 269,500 Bradford Company $ (262,500) 99,000 56,400 0 $ (107,100) $ (106,200) (107, 100) 40,000 $ (173,300) $ 122,000 0 432,000 740,000 $ 1,809,500 $ (213,330) (600,000) (90,000) (906,170) $(1,809,500) 73,500 222,000 $ 417,500 $ (179,200) (60,000) (5,000) (173, 300) $ (417,500) a-1. Complete the table to show the allocation of the fair value in excess of book value. a-2. What balance will Allen show in its Subsidiary Earnings account? b. Complete the worksheet by consolidating the financial information for these two companies. Accounts Amount Life Annual Excess Amortizations years years years years years Total $ 0 $ 0 What balance will Allen show in its Subsidiary Earnings account? Equity earnings $ $ 0 For Year Ending December 31, 2018 Consolidation Entries Accounts Allen Co. Bradford Co. Debit Credit Consolidated Totals Income Statement Revenues $ $ (572,000) 189,000 (262,500) 99,000 56,400 176,250 Cost of goods sold Depreciation expense Amortization expense Equity in subsidiary earnings Net income 0 0 (104,920) 0 (311,670) $ (107,100) $ $ 0 Statement of Retained Earnings Retained earnings 1/1 Net income (above) Dividends declared Retained earnings 12/31 0 (770,000) (311,670) 175,500 (906,170) $ (106,200) (107,100) 40,000 (173,300) $ $ 0 Balance Sheet Current assets $ 368,000 $ 122,000 Investment in Bradford Co. 0 Land 269,500 432,000 740,000 73,500 222,000 Buildings and equipment (net) Formula 0 0 Total assets $ 1,809,500 $ 417,500 $ 0 Current liabilities Common stock Additional paid-in capital Retained earnings 12/31 Total liabilities and equity (213,330) (600,000) (90,000) (906,170) $ (1,809,500) (179,200) (60,000) (5,000) (173,300) (417,500) $ 0 $ 0 $ 0 $ 0