Allison Corporation acquired all of the outstanding voting stock of Mathias, Inc., on January 1, 2017, in exchange for $5,875,000 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 $2,000,000 including retained earnings of $1,500.000. At the acquisition date, Allison prepared the following fair value allocation schedule for its newly acquired subsidiary: Consideration transferred Mathias stockholders' equity Excess fair over book value to unpatented technology (8-year remaining life) to patents (18-year remaining life) to increase long-term debt (undervalued, 5-year remaining life) $5,875,880 $3,875,800 $ 800,e9e 2,58e,89e (188,899)3,288,898 $675,e9e 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 $488,80e 25,898 2817 2018 960.890 59,89 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 Income Statement Sales Cost of goods sold Depre Amortization expense Interest expense Equity earnings in Mathias (3,98,e8) 2,589,808 277,898 103,89e $ (6,488, 4.500,800 ciation 875.890 430,890 55.80e 630,60e Net income $ (1,17e,808) $(968,80) Statement of Retained Earnings Retained earnings 1/1 Net income (above) Dividends declared $(5,348,) $(1,955,e8) (968,80e) 50.83e (1,178,80) 560,e0e Retained earnings 12/31 $(5,95e,808) $(2,865,880) Balance Sheet $143,808 75.80e 950,890 Accounts receivable 225.890 785,89 1,783,89e 6,58e,89e 3,78,89e ory Investment in Mathias Equipment (net) Pa Unpatented technology 2,852,89e 1,458,89e $ 4,655,800 95.80e 2,125,89e 425,e00 $15,659,89e $ (508,808) Accounts payable $ (1,90e,) $(1,28e,808) (500,80e) 2,865,800 $(4,655,880) Common stock Retained earnings 12/31 (8,200,ee0) 5,950,e00 Total liabilities and equity $(15,65,800) Requlrec 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