On July 1, 2018, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $835,275 in cash and equity securities. The remaining 30 percent of Atlanta's shares traded closely near an average price that totaled $357,975 both before and after Truman's acquisition. In reviewing its acquisition, Truman assigned a $140,000 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. $ Atlanta (522,000) 332,000 Revenues Operating expenses Income of subsidiary Net income Retained earnings, 1/1/18 Net income (above) Dividends declared Retained earnings, 12/31/18 Current assets Investment in Atlanta Land Buildings Total assets Liabilities Common stock Additional paid-in capital Retained earnings, 12/31/18 Total liabilities and stockholders' equity Truman $ (762,300) 494,000 (56,700) $ (325,000) $ (853,000) (325,000) 160,000 $ (1,018,000) 305,525 867,475 456,000 796,000 $ 2,425,000 $ (907,000) (95,000) (405,000) (1,018,000) $ (2,425,000) $ (190,000) $ (587,000) (190,000) 70,000 $ (707,000) $ 453,000 0 276,000 702,000 $ 1,431,000 $ (404,000) (300,000) (20,000) (707,000) $ (1,431,000) Required A Required B Required c Required 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 A TRUMAN COMPANY AND SUBSIDIARY ATLANTA COMPANY Consolidation Worksheet For Year Ending December 31, 2018 Truman Atlanta Consolidation Entries Company Company Debit Credit $ (762,300) $ (522,000) 494,000 332,000 (56,700) | $ (325,000) $ (190,000)| Noncontrolling Consolidated 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 $ Retained earnings, 1/1 $ (853,000) $ (587,000) Net income attributable to Truman $ Retained earnings, 1/1 Net income Dividends declared Retained earnings 12/31 $ (853,000) (325,000) 160,000 $ (1,018,000) (587,000) (190,000) 70,000 (707,000) $ $ $ 453,000 Current assets Investment in Atlanta 305,525 867,475 456,000 796,000 276,000 702,000 $ $ $ $ Land Buildings Patent Goodwill 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 2,425,000 (907,000) (95,000) (405,000) (1,018,000) 1,431,000 (404,000) (300,000) (20,000) (707,000) $ (2,425,000) $ (1,431,000) $
