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Allen Company acquired 100 percent of Bradford Companys voting stock on January 1, 2014, by...

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Accounting

Allen Company acquired 100 percent of Bradford Companys voting stock on January 1, 2014, by issuing 10,000 shares of its $10 par value common stock (having a fair value of $21.5 per share). As of that date, Bradford had stockholders equity totaling $168,850. Land shown on Bradfords accounting records was undervalued by $15,500. Equipment (with a five-year remaining life) was undervalued by $8,650. A secret formula developed by Bradford was appraised at $22,000 with an estimated life of 20 years.
a-1. Complete the table to show the allocation of the fair value in excess of book value.
a-2. What balance will Allen show in its Subsidiary Earnings account?
b. Complete the worksheet by consolidating the financial information for these two companies.

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