Allison Corporation acquired all of the outstanding voting stock of Mathias, Inc., on January 1, 2020, in exchange for $6,203,000 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 $2,080,000 including retained earnings of $1,580,000. At the acquisition date, Allison prepared the following fair-value allocation schedule for its newly acquired subsidiary: $6, 203,000 2,080,000 $4,123,000 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 $ 928,000 2,660,000 (180,000) 3,408,000 $ 715,000 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 2020 $450,000 2021 900,000 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. Mathias $ (3,980,000) 2,552,000 325,000 127,000 76,000 0 $ (900,000) $ (2,005, 000) (900,000) 50,000 $ (2,855,000) Allison Income Statement Sales $ (6,720,000) Cost of goods sold 4,724,000 Depreciation expense 955,000 Amortization expense 470,000 Interest expense 87,000 Equity earnings in Mathias (554, 000) Net income $ (1,038,000) Statement of Retained Earnings Retained earnings 1/1 $ (5,500,000) Net income (above) (1,038,000) Dividends declared 560,000 Retained earnings 12/31 $ (5,978,000) Balance Sheet Cash $ 99,000 Accounts receivable 1,030,000 Inventory 1,860,000 Investment in Mathias 6,786,000 Equipment (net) 3,860,000 Patents 135,000 Unpatented technology 2,205,000 Goodwill 481,000 Total assets $ 16,456,000 Accounts payable $ (1,278,000) Long-term debt (1,000,000) Common stock (8,200,000) Retained earnings 12/31 (5,978,000) Total liabilities and $ (16,456,000) equity $ 167,000 265,000 865,000 0 2,108,000 0 1,530,000 0 $ 4,935,000 $ (380,000) (1,200,000) (500,000) (2,855,000) $ (4,935,000) Required: 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 Required A B Determine the annual excess fair over book value amortization. Annual excess fair over book value amortization