Allison Corporation acquired all of the outstanding voting stock of Mathias, Inc., on January 1, 2017, 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 $1535,000. At the acquisition date, Allison prepared the following fair value allocation schedule for its newly acquired subsidiary. $6,018,500 2,035,000 $3,983,500 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 $ 856,000 2,570,000 (135,000 3,291,000 $ 692,500 Post-acquisition, 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: 2017 2018 Income $466,875 933,750 Dividends $25,000 50,000 Post-acquisition, 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: 2017 2018 Income Dividends $466,875 $25,000 933,750 50,000 No asset impairments have occurred since the acquisition date. Individual financial statements for each company as of December 31, 2018, appear below. Parentheses indicate credit balances. Dividends declared were paid in the same period. Allison Mathias Income Statement Sales Cost of goods sold Depreciation expense Amortization expense Interest expense Equity earnings in Mathias Net income Statement - Datained Eannine (6,540,000) 4,598,000 910,000 447,500 69,000 (596,750) $ (1,112,250) $(3,935, 000) 2,522,750 298,000 113,500 67,000 $ (933,750) Individual financial statements for each company as of December 31, 2018, appear below. Parentheses indicate credit balances. Dividends declared were paid in the same period. Allison Mathias $ (6,540,000) 4,598,000 910,000 447,500 69,000 (596,750) $ (1,112,250) $(3,935, 000) 2,522,750 298,000 113,500 67,000 bed ook $ (933,750) rences 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 Innstanta tarholm $ (5,410,000) (1,112,250) 560,000 $ (5,962,250) $(1,976,875) (933,750) 50,000 $(2,860,625) 153,500 242,500 820,000 85,500 985,000 1,770,000 6,670,125 3,770,000 112,500 16A AAA 2,076,500 1 ARS ADA 560,000 $ (5,962,250) 50,000 $(2,860, 625) $ 153,500 242,500 820,000 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 2,076,500 1,485,000 85,500 985,000 1,770,000 6,670,125 3,770,000 112,500 2,160,000 449,500 $ 16,002,625 $ (840,375) $ (1,000,000) (8,200,000) (5,962,250) $(16,002,625) $ 4,777,500 $ (216,875) $(1,200,000) (500,000) (2,860,625) $(4,777,500) Required: a. Determine Allison's December 31, 2018, Investment in Mathias balance. b. Prepare a worksheet to determine the consolidated values to be reported on Allison's financial statements. Required: a. Determine Allison's December 31, 2018, Investment in Mathias balance. b. Prepare a worksheet to determine the consolidated values to be reported on Allia Complete this question by entering your answers in the tabs below. Required A Required B Determine Allison's December 31, 2018, Investment in Mathias balance. Investment balance at 12/31/18 ALLISON CORPORATION AND CONSOLIDATED SUBSIDIARY Consolidation Worksheet For Year Ending December 31, 2018 Consolidation Entries Allison Mathias Debit Credit Accounts Consolidated Totals Income Statement Revenues Cost of goods sold Depreciation expense Amortization expense Interest expense Equity earnings in Mathias Net income $ (6,540,000) 4,598,000 910,000 447,500 69,000 (596,750) S (1.112,250) $ (3,935,000) 2,522,750 298,000 113,500 67,000 $ (933,750) Statement of Retained Earnings Retained earnings 1/1 Net income (above) Dividends declared Retained earnings 12/31 (5,410,000) (1.112 250) 560,000 $ (5.962,250) (1,976,875) (933.750) 50,000 S (2.860,625) Net income $ (1,112,250) $ (933,750) Statement of Retained Earnings Retained earnings 1/1 Net income (above) Dividends declared Retained earnings 12/31 (5,410,000) (1,112,250) 560,000 $ (5,962,250) (1,976,875) (933,750) 50,000 $ (2.860,625) $ 153,500 242,500 820,000 ces Balance Sheet Cash Accounts receivable Inventories Investment in Mathias Equipment (net) Patents Unpatented technology Goodwill Total assets 85,500 985,000 1,770,000 6,670,125 3,770,000 112,500 2,160,000 449,500 $ 16,002,625 2,076,500 1,485,000 $ 4,777,500 Accounts payable om dobe (840,375) 14 Ann nnmil (216,875) /4nnnnn $ 153,500 242,500 820,000 alance Sheet ash \ccounts receivable nventories nvestment in Mathias Equipment (net) Patents Unpatented technology Goodwill Total assets 85,500 985,000 1,770,000 6,670,125 3,770,000 112,500 2,160,000 449,500 $ 16,002,625 2,076,500 1,485,000 $ 4,777,500 Accounts payable Long-term debt Common stock Retained earnings 12/31 Total liabilities and equity (840,375) (1,000,000) (8,200,000) (5,962,250) $(16,002,625) (216,875) (1,200,000) (500,000) (2,860,625) $ (4,777,500)