On January 1, 2015, Truman Inc. acquired 55% interest in Dewey Corp. Truman Inc. paid for the transaction with $3,000,000 cash and 500,000 shares of common stock (par value of $1.00 per share). At the time of the acquisition Dewey's book value was $16,970,000.

On January 1, Truman stock had a market value of $14.90 per share and there was no control premium in this transaction. Any consideration transferred over book value is assigned to goodwill. Truman had the following balances on January 1, 2015:

	Book Value	Fair Value
Land	$1,700,000	$2,550,000
Buildings (7 year remaining life)	$2,700,000	$3,400,000
Equipment (5 year remaining life)	$3,700,000	$3,300,000

For internal reporting purposes, Truman employed the equity method to account for this investment.

In 2015, Truman purchased $80,000 of inventory from Dewey costing $40,000. At the end of 2015, Truman held $28,000. Truman still owes Dewey for $65,000.

The following account balances are for the year ending December 31, 2015 for both companies:

	Truman	Dewey
Revenues	($298,000,000)	($103,750,000)
Expenses	$271,000,000	$95,800,000
Equity in Income of Dewey Corp.	($4,361,500)	0
Net Income	($31,361,500)	($7,950,000)
Retained Earnings, January 1, 2015	($2,500,000)	($100,000)
Net Income (above)	($31,361,500)	($7,950,000)
Dividends Paid	$5,000,000	$3,000,000
Retained Earnings, December 31, 2015	($28,861,500)	($5,050,000)
Current Assets	$30,500,000	$20,800,000
Investment in Dewey Corp.	$13,161,500
Land	$1,500,000	$1,700,000
Buildings	$5,600,000	$2,360,000
Equipment (net)	$3,100,000	$2,960,000
Total Assets	$53,861,500	$27,820,000
Accounts Payable	($3,100,000)	($4,900,000)
Notes Payable		($1,000,000)
Common Stock	($2,900,000)	(6,000,000)
Additional Paid-In Capital	($19,000,000)	($10,870,000)
Retained Earnings, December 31, 2015 (above)	($28,861,500)	($5,050,000)
Total Liabilities & Stockholder's Equity	($53,861,500)	($27,820,000)

A) What journal entries would be recorded on January 1, 2015 and what steps would you take to get there?

B) As of January 1, 2015, Complete the fair value allocation (including goodwill allocation & amortization).

C) Complete the journal entries for consolidation on December 31, 2015.

D) Prepare a worksheet to finalize the consolidation of Dewey and Truman

E) If shares had been trading at $14.40 instead of $14.90 and a control premium existed, how would the consolidation change and what journal entries would be impacted? Explain why.