On July 1, 2018, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $761,075 in cash and equity securities. The remaining 30 percent of Atlantas shares traded closely near an average price that totaled $326,175 both before and after Trumans acquisition. In reviewing its acquisition, Truman assigned a $117,500 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 2018. In addition, the subsidiarys income was earned uniformly throughout the year. The subsidiary declared dividends quarterly. Truman Atlanta Revenues $ (757,375 ) $ (527,000 ) Operating expenses 472,000 376,000 Income of subsidiary (44,625 ) 0 Net income $ (330,000 ) $ (151,000 ) Retained earnings, 1/1/18 $ (844,000 ) $ (533,000 ) Net income (above) (330,000 ) (151,000 ) Dividends declared 145,000 60,000 Retained earnings, 12/31/18 $ (1,029,000 ) $ (624,000 ) Current assets $ 407,300 $ 357,000 Investment in Atlanta 784,700 0 Land 452,000 267,000 Buildings 773,000 715,000 Total assets $ 2,417,000 $ 1,339,000 Liabilities $ (888,000 ) $ (395,000 ) Common stock (95,000 ) (300,000 ) Additional paid-in capital (405,000 ) (20,000 ) Retained earnings, 12/31/18 (1,029,000 ) (624,000 ) Total liabilities and stockholders' equity $ (2,417,000 ) $ (1,339,000 ) 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 2018? d.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.

How did Truman allocate Atlantas acquisition-date fair value to the various assets acquired and liabilities assumed in the combination?

Consideration transferred by Truman
Noncontrolling interest fair value
Atlantas acquisition-date total fair value	$0
Book value of Atlanta
Fair value in excess of book value	$0
Excess fair value assigned:
Patent
Goodwill	$0

How did Truman allocate the goodwill from the acquisition across the controlling and noncontrolling interests?

	Controlling Interest	Noncontrolling Interest
Goodwill

How did Truman derive the Investment in Atlanta account balance at the end of 2018?

Initial value at acquisition date
Trumans share of Atlantas net income for half year
Dividends 2018
Investment account balance 12/31/18