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 $17.5 per share). As of that date, Bradford had stockholders equity totaling $112,150. Land shown on Bradfords accounting records was undervalued by $19,700. Equipment (with a five-year remaining life) was undervalued by $6,750. A secret formula developed by Bradford was appraised at $36,400 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.

	Allen Company				Bradford Company
Revenues	$	(521,000	)		$	(303,750	)
Cost of goods sold		172,000				115,500
Depreciation expense		189,000				54,000
Subsidiary earnings		(131,080	)			0
Net income	$	(291,080	)		$	(134,250	)
Retained earnings, 1/1/18	$	(762,000	)		$	(103,500	)
Net income (above)		(291,080	)			(134,250	)
Dividends declared		175,500				40,000
Retained earnings ,12/31/18	$	(877,580	)		$	(197,750	)
Current assets	$	374,000			$	101,500
Investment in Bradford		309,750				0
Company
Land		574,000				86,100
Buildings and equipment (net)		854,000				186,000
Total assets	$	2,111,750			$	373,600
Current liabilities	$	(544,170	)		$	(110,850	)
Common stock		(600,000	)			(60,000	)
Additional paid-in capital		(90,000	)			(5,000	)
Retained earnings, 12/31/18		(877,580	)			(197,750	)
Total liabilities and equity	$	(2,111,750	)		$	(373,600	)

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.