On January 1, 2017, Allan Company bought a 15 percent interest in Sysinger Company. The acquisition price of $224,500 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 $121,400 and declared cash dividends of $36,100. 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 sa% interest Fair value of Allan's 15% previous Ownership Noncontrolling interest's 5% fair value Total acquisition-date fair value for Sysinger Company $ 1,451,200 272,100 90,700 $ 1,814,000 Also, as of January 1, 2018, Allan assessed a $434,000 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 Sysinger Company Company Revenues $(1,010,380) $ (414,000) Operating expenses 667,100 258,480 Equity earnings of Sysinger (52,345) Gain on revaluation of Investment in Sysinger to fair value (34,805) @ Net income $ 430, 350 5 163,600 Retained earnings, January 1 $ (963, 680) $ (654,400) Net income (430, 350) (163,600) Dividends declared 139,900 43,400 Retained earnings, December 31 $(1,254,050) $(774,600) Current assets $ 287,500 $ 588,500 Investment in Sysinger (equity method) 1,734,415 @ Property, plant, and equipment 861,000 631,800 Patented technology 886,100 396,200 Customer contract Total assets $ 3,769,015 $ 1,615,700 Liabilities $(1,356,965) $(152,100) Common stock (937,000) (535,000) Additional paid in capital (221,000) (154,000) Retained earnings, December 31 (1,254,050) (774,600) Total liabilities and equities $(3,769,015) (1,615,700) 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. Complete this question by entering your answers in the tabs below. Required A Required 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 To goodwill 0 s 0 Red A Required B > 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. Complete this question by entering your answers in the tabs below. Required A Required B Required 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 (Required A Required 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. (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. Amounts in the Debit and credit columns should be entered as positive. Negative amounts for the Noncontrolling Interest and Consolidated Totals columns should be entered with a minus sign.) Show less Accounts ALLAN AND SY SINGER Consolidation Worksheet For Year Ending December 31, 2018 Consolidation Entries Allan Sysinger Company Company Debit Credit $ $ (414,000) (1,010,300) 667,100 250,400 (52,345) 0 (34,805) 0 $430,350 $ (163,600) Noncontrolling Consolidated Interest Totals Revenues Operating expenses Equity earnings of Sysinger Gain on revaluation Separate company net income Consolidated net income Ni attributable to noncontrolling interest Ni attributable to Allan Company Retained earnings, 1/1 Net Income Dividends declared $ 0 Retained earnings, 12/31 Current assets Investment in Sysinger Property, plant, and equipment Patented technology Customer contract Goodwill Total assets Liabilities Common stock Additional paid in capital Retained earnings, 12/31 NCI in Sysinger, 111 NCI In Sysinger, 12/31 Total lab and stockholders' equity S (963,600) S (654,400) (430,350) (163,600) 139,900 43,400 $ (1254050 5 (774,600) S 287,500 $588,500 1,734 415 0 861,000 631,000 886, 100 396,200 0 0 0 $ 3.769,015 S 1.615,700 $ (1,356,965) 5 (152, 100) (937,000) (535,000) (221,000) (154,000) (1,254,050) (774.600) 0 0 0 0 S $ 3.769015 (16157001 $ $ 0 $ 0 $ 0