On July 1, 2018, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $829,500 in cash and equity securities. The remaining 30 percent of Atlantas shares traded closely near an average price that totaled $355,500 both before and after Trumans acquisition.

In reviewing its acquisition, Truman assigned a $127,500 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.

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

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

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

4. 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.

On July 1, 2018, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $829,500 in cash and equity securities. The remaining 30 percent of Atlanta's shares traded closely near an average price that totaled $355,500 both before and after Truman's acquisition In reviewing its acquisition, Truman assigned a $127,500 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 subsidiary's income was earned uniformly throughout the year. The subsidiary declared dividends quarterly Truman Atlanta Revenues Operating expenses Income of subsidiary $ (739,075) (479,880) 403,800 (50,925) 308,800 $ (387,00(171,000) $ (915,000) (589,000) (171,000) 150,000681860- $ (1,152,000) (70e,800) $514,575402,800 Net income Retained earnings, 1/1/18 Net income (above) Dividends declared (387,000) Retained earnings, 12/31/18 Current assets Investment in Atlanta Land Buildings 859,425 444,000 225,000 715,600713,860 $ 1,340,000 $ (881,000) (320,000) (300,000) (20,000) (1,152,800) (700,ee0) $ (2,533,000) (1,340,000) 2,533,800 Total assets Liabilities Common stock Additional paid-in capital Retained earnings, 12/31/18 (95,000) (405,000) Total liabilities and stockholders' equity a. How did Truman allocate Atlanta's 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. Complete this question by entering your answers in the tabs below Required A Required B Required C Required D How did Truman allocate Atlanta's acquisition-date fair value to the various assets acquired and liabilities assumed in the combination? Consideration transferred by Truman Noncontrolling interest fair value Atlanta's acquisition-date total fair valueS Book value of Atlanta Fair value in excess of book value Excess fair value assigned: Patent Goodwill Required A RequiredB a. How did Truman allocate Atlanta's 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. Complete this question by entering your answers in the tabs below Required A Required BRequired C Required D How did Truman allocate the.goodwill from the acquisition across the controlling and noncontrolling interests? Controlling Noncontrolling Interest Interest Goodwill KRequired A RequiredC Complete this question by entering your answers in the tabs below. Required A Required B Required CReired 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. (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 TRUMAN COMPANY AND SUBSIDIARY ATLANTA COMPANY Consolidation Worksheet For Year Ending December 31, 2018 Truman Atlanta Consolidation Entries Noncontrolling Consolidated Company Company Debit Credit Interest Totals Revenues Operating expenses Net income of subsidiary Separate company net income Consolidated net income Net income attributable to NCI Net income attributable to Truman S (739,075)S (479,000) 308,000 403,000 (50,925) S (387,000) (171,000) 0 Retained earnings, 1/1 S (915,000) $ (589,000) Consolidated net income Net income attributable to NCI Net income attributable to Truman Retained earnings, 1/1 Net income Dividends declared Retained earnings 12/31 S (915,000) $(589,000) (171,000) 60,000 S (1,152,000) S(700,000) (387,000) 150,000 S 514,575 $ 402,000 Current assets Investment in Atlanta Land Buildings Patent Goodwil Total assets Liabilities Common stock Additional paid in capital Retained earnings 12/31 Noncontrolling interest 7/1 Noncontrolling interest 12/31 Total liabilities and equity 859,425 444,000 715,000 225,000 713,000 S 2,533,000 $ 1,340,000 S (881,000)S(320,000) (300,000) (20,000) (700,000) 0 (95,000) (405,000) (1,152,000) S (2,533,000) $ (1,340,000) S 0 S K Required C RequiredD