Allison Corporation acquired all of the outstanding voting stock of Mathias, Inc., on January 1 2017, in exchange for $6,100,500 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 $2,055,000 including retained earnings of $1,555,000. At the acquisition date, Allison prepared the following fair value allocation schedule for its newly acquired subsidiary $6,109,500 2,855,00 $4,845,500 Consideration transferred Mathias stockholders' equity Excess fair over book value to unpatented technology (8-year remaining life) $ 888, eee to patents (10-year remaining life) 2,610, eee to increase long-term debt (undervalued, 5-year remaining life) (155,00) Goodwill 3,343,000 $ 702,500 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 Income Dividends 2017 $459, 375 $25,800 2018 918,750 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 Incone Statement Sales $ (6,620,880) $(3,955, 088) Cost of goods sold 4,654,000 2,535,750 Depreciation expense 930,000 310, eee Amortization expense 457,500 119,500 Interest expense 77,000 71,000 Equity earnings in Mathias (577,750) Net income $ (1,879, 250) $ (918,750) Statement of Retained Earnings Retained earnings 1/1 $ (5,450,000) $(1,989,375) Net income (above) (1,079, 250) (918,750) Dividends declared 568,888 50,000 Retained earnings 12/31 $ (5,969, 250) $(2,858, 125) Balance Sheet Cash 91,500 $ 159,500 Accounts receivable 1,005,000 252,500 Inventory 1,810,000 840,000 Investment in Mathias 6,721,625 @ Equipment (net) 3,810,000 2,090,500 Patents 122,500 Unpatented technology 2,180,000 1,505,000 Goodwill 463, 580 Total assets $ 16,284,125 $ 4,847,500 Accounts payable $ (1,034,875) $ (289,375) Long-term debt $ (1,000,000) $(1,200,000) Common stock (8,200,880) (500,000) Retained earnings 12/31 (5,969,250) (2,858,125) Total liabilities and equity $(16,204, 125) $(4,847,500) $ 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. Complete this question by entering your answers in the tabs below. Required Required A B Determine Allison's December 31, 2018, Investment in Mathias balance. Investment balance at 12/31/18 Required Required B > Required Required A 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. Amounts in the Debit and Credit columns should be entered as positive. Negative amounts for the Consolidated Totals column should be entered with a minus sign.) Show less ALLISON CORPORATION AND CONSOLIDATED SUBSIDIARY Consolidation Worksheet For Year Ending December 31, 2018 Consolidation Entries Accounts Consolidated Allison Mathias Debit Credit Totals Income Statement Revenues $ $ (6,620,000) 3.955,000) Cost of goods sold 4,654,000 2,535,750 Depreciation expense 930.000 310.000 Amortization expense 457,500 119,500 Interest expenso 77,000 71,000 Equity earnings in Mathias (577,750) $ Net income $ (1.079.250) (918.750) Statement of Retained Earnings Retained earnings 1/1 Net Income (above) Dividends declared Retained earnings 12/31 (5.450,000) (1.989,375) (1,079,250) (918,750) 560,000 50,000 $ $ (5.969,250,2 858,125) Balance Sheet Cash Accounts receivable Inventories Investment in Mathias Equipment (not) Patents Unpatented technology Goodwill Total assets $ 91,500 $ 159,500 1,005,000 252.500 1,810,000 840,000 6.721,625 3,810,000 2,090,500 122.500 2,180,000 1,505.000 463,500 $ $ 16 204.125 4.847 500 Accounts payable Long term debt Common stock Retained eamings 12/31 Total liabilities and equity (1.034,875) 289,375) (1,000,000)||(1,200,000) (8,200.000) (500,000) (5.969.250)|(2,858,125) $ ((16,204.125) (4.847 500)