On July 1, 2015, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $763,175 in cash and equity securities. The remaining 30 percent of Atlantas shares traded closely near an average price that totaled $327,075 both before and after Trumans acquisition.

In reviewing its acquisition, Truman assigned a $104,500 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 2015. In addition, the subsidiarys income was earned uniformly throughout the year. Subsidiary dividend payments were made quarterly.

TRUMAN ATLANTA

Revenues

$

(715,065

)

$

(470,000

)

Operating expenses

441,000

295,000

Income of subsidiary

(53,935

)

Net income

$

(328,000

)

$

(175,000

)

Retained earnings, 1/1/15

$

(920,000

)

$

(546,000

)

Net income (above)

(328,000

)

(175,000

)

Dividends declared

140,000

90,000

Retained earnings, 12/31/15

$

(1,108,000

)

$

(631,000

)

Current assets

$

516,390

$

466,000

Investment in Atlanta

785,610

Land

412,000

271,000

Buildings

752,000

652,000

Total assets

$

2,466,000

$

1,389,000

Liabilities

$

(858,000

)

$

(438,000

)

Common stock

(95,000

)

(300,000

)

Additional paid-in capital

(405,000

)

(20,000

)

Retained earnings, 12/31/15

(1,108,000

)

(631,000

)

Total liabilities and stockholders' equity

$

(2,466,000

)

$

(1,389,000

)

A. How did Truman allocate Atlantas 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 2015? D. Prepare a worksheet to consolidate the financial statements of these two companies as of December 31, 2015