On July 1, 2021, 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 2021. In addition, the subsidiarys income was earned uniformly throughout the year. The subsidiary declared dividends quarterly.

	Truman				Atlanta
Revenues	$	(739,075	)		$	(479,000	)
Operating expenses		403,000				308,000
Income of subsidiary		(50,925	)			0
Net income	$	(387,000	)		$	(171,000	)
Retained earnings, 1/1/21	$	(915,000	)		$	(589,000	)
Net income (above)		(387,000	)			(171,000	)
Dividends declared		150,000				60,000
Retained earnings, 12/31/21	$	(1,152,000	)		$	(700,000	)
Current assets	$	514,575			$	402,000
Investment in Atlanta		859,425				0
Land		444,000				225,000
Buildings		715,000				713,000
Total assets	$	2,533,000			$	1,340,000
Liabilities	$	(881,000	)		$	(320,000	)
Common stock		(95,000	)			(300,000	)
Additional paid-in capital		(405,000	)			(20,000	)
Retained earnings, 12/31/21		(1,152,000	)			(700,000	)
Total liabilities and stockholders' equity	$	(2,533,000	)		$	(1,340,000	)

1. What is the excess fair-value assigned to patent and goodwill?

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 2021?

4. Prepare a worksheet to consolidate the financial statements of these two companies as of December 31, 2021. At year-end, there were no intra-entity receivables or payables.

Required A Required B Required C Required D What is the excess fair-value assigned to patent and goodwill? Patent Goodwill Required A Required B Required c Required D How did Truman allocate the goodwill from the acquisition across the controlling and noncontrolling interests? Controlling Noncontrolling Interest Interest Goodwill Required A. Required B Required c Required D How did Truman derive the Investment in Atlanta account balance at the end of 2021? Initial value at acquisition date Equity in earnings of Atlanta Dividends 2021 Investment account balance 12/31/21 Prepare a worksheet to consolidate the financial statements of these two companies as of December 31, 2021. At year-end, there were no ir or payables. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amour of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Input al values.) Noncontrolling Consolidated TRUMAN COMPANY AND ATLANTA COMPANY Consolidation Worksheet For Year Ending December 31, 2021 Truman Atlanta Consolidation Entries Company Company Debit Credit $ (739,075) $ (479,000) 403,000 308,000 (50,925) 0 $ (387,000 $ (171,000) 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, 1/1/21 Net income $ (915,000) $ (387,000) 150,000 $ (1,152,000) $ (589,000) (171,000) 60,000 (700,000) Dividends declared Retained earnings, 12/31/21 Current assets $ $ 402,000 Investment in Atlanta 0 514,575 859,425 444,000 715,000 Land 225,000 713,000 Buildings Patent Goodwill Total assets $ 1,340,000 2,533,000 $ (881,000) $ Liabilities $ (320,000) (95,000) (405,000) (1,152,000) (300,000) (20,000) (700,000) Common stock Additional paid in capital Retained earnings, 12/31/21 Noncontrolling interest 7/1 Noncontrolling interest 12/31 Total liabilities and stockholders' equity $ (2,533,000) $ (1,340,000)