Check my work 4 3 points On January 1, 2017, Palka, Inc., acquired 70 percent of the outstanding shares of Sellinger Company for $1.290,800 in cash. The price paid was proportionate to Sellinger's total fair value, although at the acquisition date, Sellinger had a total book value of $1,570,000. All assets acquired and liabilities assumed had fair values equal to book values except for a patent (six-year remaining life) that was undervalued on Sellinger's accounting records by $264,000. On January 1, 2018, Palka acquired an additional 25 percent common stock equity interest in Sellinger Company for $475,000 in cash. On its internal records, Palka uses the equity method to account for its shares of Sellinger. eBook Print During the two years following the acquisition, Sellinger reported the following net income and dividends: Net income Dividends declared 2017 $ 480,000 200,000 2018 $ 593,000 240,000 a. Show Palka's journal entry to record its January 1, 2018, acquisition of an additional 25 percent ownership of Sellinger Company shares. b. Prepare a schedule showing Palka's December 31, 2018, equity method balance for its Investment in Sellinger account. Saved Help 10 Update Some ace soints On July 1, 2018, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $796,600 in cash and equity securities. The remaining 30 percent of Atlanta's shares traded closely near an average price that totaled $341,400 both before and after Truman's acquisition In reviewing its acquisition, Truman assigned a $126,000 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 2018. In addition, the subsidiary's income was earned uniformly throughout the year. The subsidiary declared dividends quarterly. Atlanta $ (725,470) $ (476,000) Operating expenses Income of subsidiary eBook Revenues Truman Print 315,000 5 $ (161,000) (568,000) (161,000) 70,000 (659,000) 338,000 s 5 Net income Retained earnings, 1/1/18 Net Income (above) Dividends declared Retained earnings, 12/31/18 Current assets Investment in Atlanta Land Buildings Total assets Liabilities Common stock Additional paid-in capital Retained earnings, 12/31/18 Total liabilities and stockholders equity 414,000 (47,530) $ (359,000) $ (916,000) (359,000) 140,000 $(1,135,000) $ 528,370 819,630 397,000 755,000 $ 2,500,000 $ (865,000) (95,000) (405,000) (1.135,000 $12.500,000) 294,000 662,000 $ 1.294,000 $ (315,000) 300,000) (20,000) (659.000) $(1,294,000) a. How did Truman allocate Atlanta's acquisition date fair value to the various assets acquired and liabilities assumed in the combination? 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 2018? d. Prepare a worksheet to consolidate the financial statements of these two companies as of December 31, 2018 At year-end, there were no intra entity receivables of payables