Allison Corporation acquired all of the outstanding voting stock of Mathias, Inc., on January 1, 2020, in exchange for $6,059,500 cash. Allison intends to maintain Mathias as a wholly owned subsidiary. Both companies have December 31 fiscal year-ends. At th acquisition date, Mathias's stockholders' equity was $2,045,000 including retained earnings of $1,545,000. At the acquisition date, Allison prepared the following fair-value allocation schedule for its newly acquired subsidiary: Consideration transferred $6, 059, 500 Mathias stockholders' equity 2, 045, 090 Excess fair over book value $4, 014, 500 to unpatented technology (8-year remaining life) $ 872,000 to patents (10-year remaining life) 2, 590, 000 to increase long-term debt ( undervalued, 5-year remaining life) (145, 000) 3, 317,000 Goodwill $ 697,500 int ences 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 $ 463, 125 $ 25,000 2021 926, 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. DividendsNo 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 $ (6,580, 000) $(3, 945, 000) Cost of goods sold 4,626, 000 2,529, 250 Depreciation expense 920, 000 304, 000 Amortization expense 452, 500 116, 500 Interest expense 73, 000 69, 000 Equity earnings in Mathias (587, 250) Net income $ (1, 095, 750) $ (926, 250) Statement of Retained Earnings Retained earnings 1/1 $ (5,430, 000) $ (1, 983, 125) Net income ( above) (1, 095, 750) (926, 250) Les Dividends declared 560, 000 50, 000 Retained earnings 12/31 $ (5,965, 750) $ (2, 859, 375) Balance Sheet Cash $ 88, 500 $ 156, 500 Accounts receivable 995, 000 247 , 500 Inventory 1, 790, 000 830, 000 Investment in Mathias 6, 695, 875 Equipment (net) 3, 790, 090 2, 083, 500 Patents 117, 500 Unpatented technology 2, 170, 000 1, 495, 000 Goodwill 456, 500 Total assets $ 16, 103, 375 $ 4, 812, 500FULLIILS Unpatented technology 2, 170, 000 1, 495, 000 Goodwill 456, 500 Total assets $ 16, 103, 375 $ 4, 812, 500 Accounts payable (937, 625) $ (253, 125) Long-term debt (1, 000, 060) (1, 200, 000) Common stock (8, 200, 000) (500, 000) Retained earnings 12/31 (5,965, 750) (2, 859, 375) Total liabilities and equity $ (16,103, 375) $ (4, 812, 500 555 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. Int ences 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 whe multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit colu 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 less AComplete 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 >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 less A ALLISON CORPORATION AND CONSOLIDATED SUBSIDIARY Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Consolidated Accounts Allison Mathias Debit Credit Totals Income Statement Revenues $ (6,580,000) $ (3,945,000) Cost of goods sold 4,626,000 2,529,250 Depreciation expense 920,000 304,000 Amortization expense 452,500 116,500 Interest expense 73,000 69,000 Equity earnings in Mathias (587,250) Net income $ (1,095,750) $ (926,250)Revenues $ (6,580,000) $ (3,945,000) Cost of goods sold 4,626,000 2,529,250 Depreciation expense 920,000 304,000 Amortization expense 452,500 116,500 Interest expense 73,000 69,000 Equity earnings in Mathias (587,250) 4:18 Net income $ (1,095,750) $ (926,250) Statement of Retained Earnings Retained earnings 1/1 (5,430,000) (1,983, 125) Net income (above) (1,095,750) (926,250) Dividends declared 560,000 50,000 Retained earnings 12/31 $ (5,965,750) $ (2,859,375) ences Balance Sheet Cash $ 88,500 $ 156,500 Accounts receivable 995,000 247.500 Inventories 1,790,000 830,000 Investment in Mathias 6,695,875 Equipment (net) 3,790,000 2,083,500 Patents 117,500 2 170 annBalance Sheet Cash 88,500 $ 156,500 Accounts receivable 995,000 247,500 Inventories 1,790,000 830,000 Investment in Mathias 6,695,875 Equipment (net) 3,790,000 2,083,500 4-12 Patents 117,500 Unpatented technology 2, 170,000 1,495,000 Goodwill 456,500 Total assets $ 16,103,375 $ 4,812,500 Accounts payable (937,625) (253, 125) ences Long-term debt (1,000,000) (1,200,000) Common stock 8,200,000 500,000 Retained earnings 12/31 (5,965,750) (2,859,375) Total liabilities and equity $ (16, 103,375) $ (4,812,500) $ 17,643,500