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, Mathiass stockholders equity was $2,080,000 including retained earnings of $1,580,000.

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: 2020 2021 Income $ 450,000 900,000 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. Allison Mathias Income Statement Sales Cost of goods sold Depreciation expense Amortization expense $ (6,720,000) 4,724,000 955,000 470,000 $(3,980,000) 2,552,000 325,000 127,000 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 ALLISON CORPORATION AND CONSOLIDATED SUBSIDIARY Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Allison Mathias Debit Credit Consolidated Totals Accounts Income Statement Revenues Cost of goods sold Depreciation expense Amortization expense Interest expense Equity earnings in Mathias Not income $ 16,720,000) $ (3,980,000) 4.724,000 2,552,000 955,000 325,000 470,000 127,000 87.000 76,000 (554 000) S 1.038,000) (900,000) ) $(10,700,000) 7.275.000 1.280,000 979,000 127,000 382 000 38,000 554 000 0 $ (1.038.000) 2,005,000 Statement of Retained Earnings Retained earnings 1/1 Not income (above) Dividends declared (5.500,000) (11038.000 560,000 (2005,000) 1900,000 50.000 (5,500,000) (1,038,000) 560,000 50.000 Homework Sreed Help 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. All don Mathias 9.16.720,0001 4.725,000 955,000 470,000 87,000 (554.000 $ (1,038,000) $13,980,000 2,552,000 325,000 127,000 36,000 $ 900,000) $ (5.500.000 (1,038,000) 560,000 $ (5,978,000) $12,005, 000) 1900,000) 50,000 $(2,855,000) Income Statement Salem Cort of goods sold Depreciation expense Amortization expense Interest expense quity earnings in Mathias Net Income Statement of Retained Karnings Retained earning 1/1 Net incone nabave Dividends declared Retained earnings 12/31 Balanco Sheet Cash Accounts receivable Inventory Investment in Mathias Equipment (net) Patente Unpatented technology Goodwill Total annet Accounts payable tong-term debt Connon stock Retained earnings 2/3 Total Itabilities and equity $ 99,000 1,030,000 1,860.000 6.786.000 3,860,000 135.000 2,205.000 481,000 $ 16, 456,000 ( enos (1,000,000) (0,200,000) 5,225.000) $116.456,000) $ 167,000 265,000 $65,000 0 2,108,000 1,530,000 0 $ 4,935,000 $ 380,000) 11,200,000) (500.000) 12.895,000 $14,935,000) Shows what is correct or incorrect for the work you have completed so far. It does not indicate completion. 4 Return Statement of Retained Earnings Retained earnings 1/1 Net income (above) Dividends declared 2,005,000 (5,500,000) (1,038,000) 560,000 (2,005,000) (900,000) 50,000 20 points (5,500,000) (1,038,000) 560,000 50,000 Retained earnings 12/31 $(5,978,000) (2,855,000) $ (5,978,000) X 01:05:35 Balance Sheet 167,000 265,000 865,000 50,000 6,836,000 Cash Accounts receivable Inventories Investment in Mathias Equipment (net) Patents Unpatented technology Goodwill Total assets $ 99,000 1,030,000 1,860,000 6,786,000 3,860,000 135,000 2,205,000 481,000 $ 16,456,000 2,108,000 $ 266,000 1,295,000 2,725,000 0 5,968,000 0 x OX 1,196,000 $ 11,450,000 1,530,000 266,000 116,000 715,000 $ 4,935,000 Accounts payable Long-term debt Common stock Retained earnings 12/31 (1,278,000) (1,000 (8,200,000) (5,978,000) IS |(16,456,000) (380,000) (1,200,000) (500,000) (2,855,000) 36,000 500,000 (1,658,000) (2,164,000) $ (8,200,000) $ (5,978,000) $ 18,144,000 Total liabilities and equity (4.935,000) $ 4,242,000 $ 7,304,000 Me