Allison Corporation acquired all of the outstanding voting stock of Mathias, Inc., on January
1,2020 , in exchange for $6,018,500 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 $2,035,000 including retained earnings of $1,535,000. At the
acquisition date, Allison prepared the following fair-value allocation schedule for its newly
acquired subsidiary: 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 31, 2021,
follow. Parentheses indicate credit balances. Dividends declared were paid in the same period.
Required: a. Determine the annual excess fair over book value amortization. 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 M.pdf
1. Allison Corporation acquired all of the outstanding voting stock of Mathias, Inc., on January
1,2020 , in exchange for $6,018,500 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 $2,035,000 including retained earnings of $1,535,000. At the
acquisition date, Allison prepared the following fair-value allocation schedule for its newly
acquired subsidiary: 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 31, 2021,
follow. Parentheses indicate credit balances. Dividends declared were paid in the same period.
Required: a. Determine the annual excess fair over book value amortization. b. Prepare a
worksheet to determine the consolidated values to be reported on Allison's financial statements.
