Allison Corporation acquired all of the outstanding voting stock of Mathias, Inc., on January 1, 2017, in exchange for $6,039,000 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 $2,040,000 including retained earnings of $1,540,000.

At the acquisition date, Allison prepared the following fair value allocation schedule for its newly acquired subsidiary:

Consideration Transferred		$6,039,000
Mathias Stockholders equity		2,040,000
Excess fair over book value		3,999,000
To unpatented technology (8-year remaining life)	$864,000
To patents (10-year remaining life)	2,580,000
To increase long-term debt (undervalued, 5-year remaining life)	(140,000)	3,304,000
Goodwill		695,000

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:

	Income	Dividends
2017	$465,000	$25,000
2018	$930,000	$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	(6,560,000)	(3,940,000)
Cost of Goods Sold	4,612,000	2,526,000
Depreciation Expense	915,000	301,000
Amortization Expense	450,000	115,000
Interest Expense	71,000	68,000
Equity earnings in Mathias	(592,000)	0
Net Income	(1,104,000)	(930,000)
Statement of Retained Earnings
Retained Earnings 1/1	(5,420,000)	(1,980,000)
Net Income (above)	(1,104,000)	(930,000)
Dividends Declared	560,000	50,000
Retained Earnings 12/31	(5,964,000)	(2,860,000)
Balance Sheet
Cash	87,000	155,000
Accounts Receivable	990,000	245,000
Inventory	1,780,000	825,000
Investment in Mathias	6,683,000	0
Equipment (net)	3,780,000	2,080,000
Patents	115,000	0
Unpatented Technology	2,165,000	1,490,000
Goodwill	453,000	0
Total Assets	16,053,000	4,795,000
Accounts Payable	(889,000)	(235,000)
Long-term debt	(1,000,000)	(1,200,000)
Common Stock	(8,200,000)	(500,000)
Retained Earnings 12/31	(5,964,000)	(2,860,000)
Total Liabilities and equity	(16,053,000)	(4,795,000)

Required:

Determine Allisons December 31, 2018, Investment in Mathias Balance

Prepare a worksheet to determine the consolidated values to be reported on Allisons financial statements.

Allison Corporation and Consolidated Subsidiary
Consolidated Worksheet
For year ending Dec 31, 2018
			Consolidated Entries
Accounts	Allison	Mathias	Debit	Credit	Consolidated Totals
Income Statement
Revenues	(6,560,000.00)	(3,940,000.00)
Cost of Goods Sold	4,612,000.00	2,526,000.00
Depreciation Expense	915,000.00	301,000.00
Amortization Expense	450,000.00	115,000.00
Interest Expense	71,000.00	68,000.00
Equity Earnings in Mathias	(592,000.00)
Net Income	(1,104,000.00)	(930,000.00)
Statement of Retained Earnings
Retained Earnings 1/1	(5,420,000.00)	(1,980,000.00)
Net Income (Above)	(1,104,000.00)	(930,000.00)
Dividends Declared	560,000.00	50,000.00
Retained Earnings 12/31	(5,964,000.00)	(2,860,000.00)
Balance Sheet
Cash	87,000.00	155,000.00
Accounts receivable	990,000.00	245,000.00
Inventories	1,780,000.00	825,000.00
Investment in Mathias	6,683,000.00
Equipment (net)	3,780,000.00	2,080,000.00
Patents	115,000.00
Unpatented Technology	2,165,000.00	1,490,000.00
Goodwill	453,000.00
Total Assets	16,053,000.00	4,795,000.00
Accounts Payable	(889,000.00)	(235,000.00)
Long-term Debt	(1,000,000.00)	(1,200,000.00)
Common Stock	(8,200,000.00)	(500,000.00)
Retained Earnings 12/31	(5,964,000.00)	(2,860,000.00)
Total Liabilities and equity	(16,053,000.00)	(4,795,000.00)