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On July 1, 2021, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $764,050 in cash and equity

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On July 1, 2021, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $764,050 in cash and equity securities. The remaining 30 percent of Atlanta's shares traded closely near an average price that totaled $327,450 both before and after Truman's acquisition. In reviewing its acquisition, Truman assigned a $108,000 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 2021. In addition, the subsidiary's income w earned uniformly throughout the year. The subsidiary declared dividends quarterly. Revenues Operating expenses Income of subsidiary Net income $ Truman (693,510) Atlanta $ 421,000 (445,000) 322,000 (35,490) 0 $ (308,000) $ (123,000) Retained earnings, 1/1/21 $ (849,000) $ (567,000) Net income (above) (308,000) (123,000) Dividends declared 160,000 90,000 Retained earnings, 12/31/21 $ (997,000) $ (600,000) Current assets $ 411,960 $ 408,000 Investment in Atlanta 768,040 0 Land 470,000 Buildings Total assets Liabilities 726,000 $ 2,376,000 $ (879,000) 246,000 633,000 $ 1,287,000 $ (367,000)

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