Allison Corporation acquired all of the outstanding voting stock of Mathias, Inc., on January 1, 2020, in exchange for $6,018,500 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 $2,035,000 including retained earnings of $1,535,000. At the acquisition date, Allison prepared the following fair-value allocation schedule for its newly acquired subsidiary: Consideration transferred $6, 018, 500 Mathias stockholders' equity 2, 035, 000 Excess fair over book value $3,983, 500 to unpatented technology (8-year remaining life) $ 856,000 to patents (10-year remaining life) 2, 570, 000 to increase long-term debt (undervalued, 5-year remaining life) (135 , 000 ) 3, 291, 000 Goodwill $ 692,500 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: Income Dividends 2020 $ 466, 875 $ 25, 000 2021 933, 750 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 Income Statement Sales $ (6, 540, 000) $ (3, 935, 000) Cost of goods sold 4, 598, 060 2, 522, 750 Depreciation expense 910, 000 298, 006 Amortization expense 447, 500 113, 500 Interest expense 69, 000 67, 000 Equity earnings in Mathias (596, 750) Net income $ (1, 112, 250) (933, 750) Statement of Retained Earnings Retained earnings 1/1 $ (5, 410, 000) $ (1, 976, 875) Net income (above) (1, 112, 250 933, 750 Dividends declared 560, 060 50,000 Retained earnings 12/31 $ (5,962, 250) $(2, 860, 625) Balance Sheet Cash 85,500 153, 560 Accounts receivable 985, 060 242, 500 Inventory 1, 770,000 820, 000 Investment in Mathias 6, 670, 125 Equipment (net) 3,770,000 2, 076,500 Patents 112, 500 Unpatented technology 2, 160, 000 1, 485, 000 Goodwill 449 , 500 Total assets 579'200'91 $ $ 4, 777,500 Accounts payable (840, 375) (216, 875) Long-term debt (1, 000, 000) 1, 200, 000 Common stock 8, 200, 000 (500, 000) Retained earnings 12/31 (5, 962, 250) (2, 860, 625) Total liabilities and equity $(16, 002, 625) $ (4, 777, 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 nancial 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. Required B > 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. Input all amounts as positive values.) Show l-SA Income Statement Revenues $ (6,540,000) Cost of goods sold 4,598,000 Depreciation expense 910,000 Amortization expense 447,500 Interest expense 69,000 Equity earnings in Mathias (596,750) Net income $ (1,112,250) $ (933,750) Statement of Retained Earnings Retained earnings 111 (5,410,000) (1,976,875) Net income (above) (1,112,250) (933,750) Dividends declared 560,000 50,000 Retained earnings 12131 $ (5,962,250) $ (2,860,625) Balance Sheet Cash 8% 85, 500 $ 153,500 Accounts receivable 985,000 242,500 Inventories 1,770,000 820,000 Investment in Mathias 6,670,125 Equipment (net) 3,770,000 2,076,500 Patents 112,500 Unpatented technology 2,160,000 1,485,000 Goodwill 449,500 Total assets 3% 16,002,625 $ 4,777,500 Accounts payable (840,375) Longterm debt (1,000,000) Common stock (8,200,000) Retained earnings 12131 (5,962,250) (2,860,625) Total liabilities and equity 8% (16,002,625) $ (4,777,500) $ 17,500,500 ( Required A