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 $16.50 per share). As of that date, Bradford had stockholders equity totaling $108,600. Land shown on Bradfords accounting records was undervalued by $11,400. Equipment (with a five-year remaining life) was undervalued by $9,800. A secret formula developed by Bradford was appraised at $35,200 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	$	(740,000	)		$	(283,750	)
Cost of goods sold		245,000				107,500
Depreciation expense		138,750				74,400
Subsidiary earnings		(98,130	)			0
Net income	$	(454,380	)		$	(101,850	)
Retained earnings, 1/1/21	$	(710,000	)		$	(122,100	)
Net income (above)		(454,380	)			(101,850	)
Dividends declared		175,500				40,000
Retained earnings ,12/31/21	$	(988,880	)		$	(183,950	)
Current assets	$	452,000			$	77,500
Investment in Bradford		286,750				0
Company
Land		474,000				83,400
Buildings and equipment (net)		756,000				237,000
Total assets	$	1,968,750			$	397,900
Current liabilities	$	(289,870	)		$	(148,950	)
Common stock		(600,000	)			(60,000	)
Additional paid-in capital		(90,000	)			(5,000	)
Retained earnings, 12/31/21		(988,880	)			(183,950	)
Total liabilities and equity	$	(1,968,750	)		$	(397,900	)

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.