On January 1, 2017, Allan Company bought a 15 percent interest in Sysinger Company. The acquisition price of $231,500 reflected an assessment that all of Sysinger's accounts were fairly valued within the company's accounting records. During 2017, Sysinger reported net income of $125,100 and declared cash dividends of $37,200. Allan possessed the ability to influence significantly Sysinger's operations and, therefore, accounted for this investment using the equity method. On January 1,2018, Allan acquired an additional 80 percent interest in Sysinger and provided the following fair-value assessments of Sysinger's ownership components: consideration transferred by Allan for 80% interest Fair value of Allan's 15% previous ownership Noncontrolling interest's 5% fair value $ 1,459,200 273,600 91,200 $ 1,824,000 Total acquisition-date fair value for Sysinger Company Also, as of January 1, 2018, Allan assessed a $439,000 value to an unrecorded customer contract recently negotiated by Sysinger. The customer contract is anticipated to have a remaining life of four years. Sysinger's other assets and liabilities were judged to have fair values equal to their book values. Allan elects to continue applying the equity method to this investment for internal reporting purposes At December 31, 2018, the following financial information is available for consolidation Allan Company Sysinger Company $ (1,021,900) (419,000) 253,400 Revenues Operating expenses Dpeity earnings of 5y nnvestment in(28,915) 165,600 674,700 (53,058) Gain on revaluation of Investment in Sysinger to fair value $429,173 165,600 $ (961,000) (662,400) 43,900 $ (1,250,673) $ (784,100) $ 286,700 595,600 636,000 399,300 Net income Retained earnings, January 1 Net income Dividends declared (429,173) 139,500 (165,600) Retained earnings, December 31 Current assets Investment in Sysinger (equity method) Property, plant, and equipment Patented technology Customer contract 1,744,153 868,000 893,300 $ 3,792,153 1,630,900 $ (1,370,480) (163,800) Total assets Liabilities Common stock Additional paid-in capital Retained earnings, December 31 (944,000) (227,000) (1,250,673) (543,000) (140,000) (784,100) $ (3,792,153) (1,630,900) Total liabilities and equities a. How should Allan allocate Sysinger's total acquisition-date fair value (January 1, 2018) to the assets acquired and liabilities assumed for consolidation purposes? b. Calculate the following as they would appear in Allan's pre-consolidation 2018 statements c. 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 or payables dARequired B Required C How should Allan allocate Sysinger's total acquisition-date fair value (January 1, 2018) to the assets acquired and liabilities assumed for consolidation purposes? Fair value of Sysinger 1/1/18 Book value of Sysinger 1/1/18 Excess fair value over book value To customer contract 0 To goodwill Required A Required BRequired C Calculate the following as they would appear in Allan's pre-consolidation 2018 statements. Equity in earnings of Sysinger on revaluation of investment in Sysinger to fair value Investment in Sysinger ALLAN AND SYSINGER Consolidation Worksheet For Year Ending December 31, 2018 Consolidation Entries Allan Company Sysinger Company Noncontrolling Consolidated Debit Credit Accounts Totals Interest (1.021,900) S (419,000) 253,400 Revenues Operating expenses Equity earnings of Sysinger Gain on revaluation Separate company net income Consolidated net income 674,700 (53,058) (28,915) $ 429,173 $ (165,600) NI attributable to noncontrolling interest NI attributable to Allan Company Retained earnings, 1/1 Net income Dividends declared Retained earnings, 12/31 Current assets Investment in Sysinger Property, plant, and equipment Patented technology Customer contract Goodwill $ (961,000) $ (662,400) (429,173) 165,600) 43,900 $ (784,100) $ 286,700 $ 595,600 139,500 1,250,673 1,744,153 868,000 893,300 636,000 399,300 $3,792,153 $1,630,900 Total assets Liabilities Common stock Additional paid in capital Retained earnings,12/31 NCI in Sysinger, 1/1 NCl in Sysinger, 12/31 (1.370,480) S (163,800) (944,000) (543,000) (227,000)(140,000) (1,250,673) (784,100) 0 Total liab. and stockholders' equity 3,792,153) (1,630,900