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2 On July 1, 2021. Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $749,000 in cash and equity

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2 On July 1, 2021. Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $749,000 in cash and equity securities. The remaining 30 percent of Atlanta's shares traded closely near an average price that totaled $321,000 both before and after Truman's acquisition In reviewing its acquisition, Truman assigned a $112,500 fair value to a patent recently developed by Atlanta, even though it was not recorded within the financial records of the subsidiary. This patent is anticipated to have a remaining life of five years. The following financial information is available for these two companies for 2021 In addition, the subsidiary's income was earned uniformly throughout the year. The subsidiary declared dividends quarterly 3.5 points Revenues Operating expenses Incone of wubsidiary Net Inco Retained earnings. 1/1/21 Net incone (above) Dividends declared Retained earnings, 12/31/21 Current anset Investment in Atlanta Land Buildings Total susta Liabilities Common stock Additional paid-in capital Retained earnings, 12/31/21 Total liabilities and stockholders' equity Truman 3 (742,995) 476,000 46,025) 5 (313,000) $(900,000) (313,000) 160.000 $(1.059.000) $ 504,975 767,025 465.000 720.000 $ 2,457,000 $ (98,000) (95,000) (405,000) 1,059,900) $(2,457,000) Atlanta (468,000) 314,000 0 $ (154.000) $ (510,000) (154.000) 20.000 $(584,000) $ 404,000 0 241,000 646.000 $ 1.291,000 $ 387,000) 1:300,000) (20,000) (584,000) $(1.291.000) a. What is the excess fair-value assigned to patent and goodwill? b. How did Truman allocate the goodwill from the acquisition across the controlling and noncontrolling interests? c. How did Truman derive the Investment in Atlanta account balance at the end of 2021? financial statements of these two companies as of December 31, 2021 At year-end, there Prepare a worksheet to consolidate the financial statements of these two companies as of December 31, 2021. At year-end, there were no intra-entity receivables or payables. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Input al amounts as positive values.) Show TRUMAN COMPANY AND ATLANTA COMPANY Consolidation Worksheet For Year Ending December 31, 2021 Truman Atlanta Consolidation Entries Company Company Debi Credit $ (742.975) (468,000) 476,000 314,000 0 $ (313.000) $ (154.000) Nencontrolling Consultad Totale (48,026) Revenues Operating expenses Net Income of subsidiary Separate company net income Consolidated net income Net income attributable to NCI Net income attributable to Truman Retained earnings, 1/1/21 Net Income Dividends declared Retained earnings, 12/31/21 $ (906,000) $ (510,000) (313,000) (154.000) 160.000 80.000 $ (1.059.000) $ (584,000) $ Current assets Investment in Atlanta Land Buildings 504,975 5 767025 465,000 720.000 404,000 0 241.000 646,000 Net income attributable to Truman Retained earnings, 1/1/21 Net income Dividends declared Retained earnings, 12/31/21 $ (906,000) $ (313,000) 160,000 $ (1,059,000) $ (510,000) (154,000) 80,000 (584,000) $ 504,975 $ 767,025 404,000 0 241,000 465,000 720,000 646 000 Current assets Investment in Atlanta Land Buildings Patent Goodwill Total assets Liabilities Common stock Additional paid in capital Retained earnings, 12/31/21 Noncontrolling interest 7/1 Noncontrolling interest 12/31 Total liabilities and stockholders' equity $ 2,457,000 $1.291,000 $ (898,000) $ (387.000) (95,000) (300,000) (405,000) (20,000) (1.059,000) (584000) 0 $ 0 $ (2.457.000) $ (1.291,000) 5

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