Allison Corporation acquired all of the outstanding voting stock of Mathias, Inc., on January 1, 2020, in exchange for $6,387,500 in cash. Allison intends to maintain Mathias as a wholly owned subsidiary. Both companies have December 31 fiscal year-ends. At the acquisition date, Mathias's stockholders' equity was $2,125,000 including retained earnings of $1,625,000. At the acquisition date, Allison prepared the following fair-value allocation schedule for its newly acquired subsidiary: Consideration transferred Mathias stockholders' equity Excess fair over book value to unpatented technology (8-year remaining life) to patents (10-year remaining life) to increase long-term debt (undervalued, 5-year remaining life) Goodwill $6,387,500 2,125,000 $4,262,500 $1,000,000 2,750,000 (225,000) 3,525,000 $ 737,500 Postacquisition, Allison employs the equity method to account for its investment in Mathias. During the two years following the business combination, Mathias reports the following income and dividends: 2020 2021 Incone Dividends $433,125 866,250 $25,000 50,000 No asset impairments have occurred since the acquisition date. Individual financial statements for each company as of December 31, 2021, follow. Parentheses indicate credit balances. Dividends declared were paid in the same period. Income Statement Sales Cost of goods sold Depreciation expense Amortization expense Interest expense Equity earnings in Mathias Net income Allison Mathias $ (6,900,000) 4,850,000 $(4,025,000) 2,581,250 492,500 105,000 (511,250) (963,750) 1,000,000 352,000 140,500 85,000 $ (866,250) Statement of Retained Earnings Retained earnings 1/1 Net income (above) Dividends declared $ (5,590,000) (963,750) 560,000 $(2,033,125) (866,250) 50,000 $(2,849,375) Retained earnings 12/31 $ (5,993,750) Balance Sheet Cash 112,500 180,500 Accounts receivable 1,075,000 287,500 Inventory 1,950,000 910,000 Investment in Mathias 6,901,875 0 Equipment (net) Patents Unpatented technology Goodwill Total assets Accounts payable Long-term debt Common stock Retained earnings 12/31 Total liabilities and equity 3,950,000 2,139,500 157,500 2,250,000 512,500 0 1,575,000 0 $ 16,909,375 $ (1,715,625) (1,000,000) (8,200,000) (5,993,750) $(16,909,375) $ 5,092,500 $ (543,125) (1,200,000) (500,000) (2,849,375) $(5,092,500) Required: a. Determine the annual excess fair over book value amortization. b. Prepare a worksheet to determine the consolidated values to be reported on Allison's financial statements. Complete this question by entering your answers in the tabs below. Required A Required B Prepare a worksheet to determine the consolidated values to be reported on Allison's financial statements. (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. Inout all amounts as positive values.)