Allison Corporation acquired all of the outstanding voting stock of Mathlas, Inc., on January 1, 2020, in exchange for $6,223,500 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 $2,085,000 Including retained earnings of $1,585,000 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 $6,223,500 2,885, see $4,138, see 5936,80 2,670, eee (185, eee) 3,421, eee $ 217,500 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 Income $448,125 896,250 Dividends $ 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. Allison Mathias $ (6,740,000) 4,738,000 960,000 472,500 89,000 (549,250) $ (1,029,750) $(3,985,880) 2,555, 256 328,000 128,500 77,000 B $ (896,250) $ (5,510,000) (1,029,750) 560,990 $ (5,979,750) $(2,088, 125) (896,258) 50,000 $(2,854,375) Income statement Sales Cost of goods sold Depreciation expense Amortization expense Interest expense Equity earnings in Mathias Net income Statement of Retained Earnings Retained earnings 1/1 Net income (above) Dividends declared Retained earnings 12/31 Balance Sheet Cash Accounts receivable Inventory Investment in Mathias Equipment (net) Patents Unpatented technology Goodwill Total assets Accounts payable Long-term debt Common stock Retained earnings 12/31 Total liabilities and equity $ 168,500 267,500 870,000 @ 2,111,500 1,535, eee 100, 500 1,235,800 1,870,000 6,798,875 3,870,000 137,500 2,210,000 484,500 $ 16,506, 375 $ (1,326,625) (1,000,000) (3,288,888 (5,979,750 $(16,586,375) $ 4,952,500 $ (398, 125) (1, 280, 280) (580, 800) (3,854,375) $(4,952,500) Required: a. Determine the annual excess falr 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 Determine the annual excess fair over book value amortization. Annual excess fair over book value amortization Required B > ALLISON CORPORATION AND CONSOLIDATED SUBSIDIARY Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Accounts Allison Mathias Debit Credit Consolidated Totals Income Statement Revenues Cost of goods sold Depreciation expense Amortization expense Interest expense Equity earnings in Mathias Net income $ (6.740,000) $ (3,085,000) 4,738,000 2,555,250 980,000 328,000 472,500 128.500 89.000 77.000 (549,250) $ (1,029,750) $ (896.250) Statement of Retained Earnings Retained earnings 1/1 Net income (above) Dividends declared Retained earnings 12/31 (5.510,000) (1.029.750) 560.000 (5,979,750) (2,008.125) (896.250) 50,000 $ (2,854.375) Balance Sheet S $ Cash Accounts receivable 168,500 100.500 1.035.000 267,500 Inventories 1.870.000 870.000 0.798.875 Investment in Mathias Equipment (net) 3.870,000 2.111 500 2.111.500 Equipment (net) Patents Unpatented technology Goodwill Total assets 3,870,000 137.500 2,210.000 1,535,000 484,500 $ 10,506,375 $ 4,952,500 (1.326,625) +1.000.000) Accounts payable Long-term debt Common stock Retained earnings 12/31 Total liabilities and equity (8.200,000) (5.970.750) $(16.500.375) (398,125) (1.200,000) (500.000) (2,854.375) $ (4.952,500) $18.215.500