Allison Corporation acquired all of the outstanding voting stock of Mathias, 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 2,085,000 $4,138,500 $ 936,000 2,670,000 (185,000) 3,421,000 $ 717,500 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 Dividends $ 448,125 $ 25,000 896,250 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 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 Allison Mathias $ (6,740,000) $(3,985,000) 2,555,250 4,738,000 960,000 472,500 89,000 (549,250) $ (1,029,750) $ (5,510,000) (1,029,750) 560,000 $ (5,979,750) 100,500 1,035,000 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) (8,200,000) (5,979,750) $(16,506,375) 328,000 128,500 77,000 0 $ (896,250) $(2,008,125) (896,250) 50,000 $(2,854,375) $ 168,500 267,500 870,000 2,111,500 1,535,000 0 $ 4,952,500 $ (398,125) (1,200,000) (500,000) (2,854,375) $(4,952,500) Required A Required B Determine the annual excess fair over book value amortization. Annual excess fair over book value amortization 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. Input all amounts as positive values.) ALLISON CORPORATION AND CONSOLIDATED SUBSIDIARY Consolidation Worksheet For Year Ending December 31, 2021 Allison Mathias Debit Consolidation Entries Credit Consolidated Totals Accounts Income Statement Revenues 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 Inventories 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 $ (6,740,000) $ (3,985,000) 4,738,000 2,555,250 960,000 328,000 472,500 128,500 89,000 77,000 (549,250) $ (1,029,750) $ (896,250) (5,510,000) (2,008,125) (1,029,750) 560,000 (896,250) 50,000 $ (5,979,750) $ (2,854,375) $ 100,500 $ 168,500 1,035,000 1,870,000 267,500 870,000 6,798,875 3,870,000 2,111,500 137,500 2,210,000 1,535,000 484,500 $ 16,506,375 $ 4,952,500 (1,326,625) (398,125) (1,000,000) (1,200,000) (8,200,000) (5,979,750) (500,000) (2,854,375) $ (16,506,375) $ (4,952,500) $ 18,215,500 Show less