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Required a . Show how Allison determined its December 3 1 , 2 0 2 4 , Investment in Mathias balance. b . Prepare a
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a Show how Allison determined its December Investment in Mathias balance.
b Prepare a worksheet to determine the consolidated values to be reported on Allison's financial statements.
Allison Corporation acquired all of the outstanding voting stock of Mathias, Inc., on January in exchange for $ in cash. Allison intends to maintain Mathias as a wholly owned
subsidiary. Both companies have December fiscal yearends. At the acquisition date, Mathias's stockholders' equity was $ including retained earnings of $
At the acquisition date, Allison prepared the following fairvalue allocation schedule for its newly acquired subsidiary:
Consideration transferred
Mathias stockholders' equity
Excess fair over book value
to unpatented technology year remaining life
to patents year remaining life
to increase longterm debt undervaluedyear remaining life
Goodwill
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:
No asset impairments have occurred since the acquisition date.
Individual financial statements for each company as of December follow. Parentheses indicate credit balances. Dividends declared were paid in the same period.
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