On January 1, 2020, Allan Company bought a 15 percent interest in Sysinger Company. The acquisition price of $207,500 reflected an assessment that all of Sysinger's accounts were fairly valued within the company's accounting records. During 2020, Sysinger reported net income of $112.300 and declared cash dividends of $33,600. Allan possessed the ability to significantly influence Sysinger's operations and therefore, accounted for this investment using the equity method. On January 1, 2021, 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 808 interest Fair value of Allan's 158 previous ownership Noncontrolling interest's 5t fair value Total acquisition date fair value for Sysinger Company $ 1,424,000 267,000 89,000 $1,780,000 Also, as of January 1, 2021, Allan assessed a $417,000 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 liabilties 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, 2021, the following financial information is available for consolidation: Allan Sysinger Company Company Revenges (970, 600) $ (403,000) Operating expenses 641,000 243,800 Equity earnings of Sysinger (52,203) Gain on revaluation of Investment in faina tn fair value 5 0 147.6951 Allan Company (970, 600) 641,000 (52,203) $ Sysinger Company (403,000) 243,800 0 Revenues Operating expenses Equity earnings of Sysinger Gain on revaluation of Investment in Sysinger to fair value Net income Retained earnings, January 1 Net income Dividends declared Retained earnings, December 31 Current assets Investment in Sysinger (equity method) Property, plant, and equipment Patented technology Customer contract Total assets Liabilities Common stock Additional paid-in capital Retained earnings, December 31 Total liabilities and equities (47,695) $ 429,498 $ (961,700) (429, 498) 139, 600 $(1,251,598) $ 286,900 1,703,018 845,000 869,600 0 $ 3,704,518 $(1,331,920) (917,000) (204,000) (1,251,598). $ (3,704,518) 0 $ 159, 200 $ (636, 800) (159,200) 42,300 $ (753, 700) $ 572,900 0 614,000 385, 400 0 $ 1,572,300 (113,600) (521,000) (184,000) (753, 700) $ (1,572,300) Droit Anfa BE a. How should Allan allocate Sysinger's total acquisition-date fair value (January 1, 2021) to the assets acquired and liabilities assumed for consolidation purposes? b. Calculate the following as they would appear in Allan's pre-consolidation 2021 statements Equity in earnings of Sysinger Gain on revaluation of Investment in Sysinger to fair value Investment in Sysinger c. 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. Complete this question by entering your answers in the tabs below. Reg A Reg 31 Reg B2 Reg B3 Required 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 uired, combine all debitantes into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter the amount in the credit column the worksheet. Input all amounts as positive values.)
