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 $18.5 per share). As of that date, Bradford had stockholders equity totaling $128,100. Land shown on Bradfords accounting records was undervalued by $15,800. Equipment (with a five-year remaining life) was undervalued by $8,300. A secret formula developed by Bradford was appraised at $32,800 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	$	(509,000	)		$	(241,250	)
Cost of goods sold		168,000				90,500
Depreciation expense		179,250				69,900
Subsidiary earnings		(77,550	)			0
Net income	$	(239,300	)		$	(80,850	)
Retained earnings, 1/1/18	$	(856,000	)		$	(119,100	)
Net income (above)		(239,300	)			(80,850	)
Dividends declared		175,500				40,000
Retained earnings ,12/31/18	$	(919,800	)		$	(159,950	)
Current assets	$	280,000			$	93,500
Investment in Bradford		265,350				0
Company
Land		510,000				64,800
Buildings and equipment (net)		786,000				182,000
Total assets	$	1,841,350			$	340,300
Current liabilities	$	(231,550	)		$	(115,350	)
Common stock		(600,000	)			(60,000	)
Additional paid-in capital		(90,000	)			(5,000	)
Retained earnings, 12/31/18		(919,800	)			(159,950	)
Total liabilities and equity	$	(1,841,350	)		$	(340,300	)

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.