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On July 1, 2021, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $756,525 in cash and equity securities.

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On July 1, 2021, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $756,525 in cash and equity securities. The remaining 30 percent of Atlanta's shares traded closely near an average price that totaled $324,225 both before and after Truman's acquisition In reviewing its acquisition, Truman assigned a $130,500 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 subsidiary's income was earned uniformly throughout the year. The subsidiary declared dividends quarterly Revenues Operating expenses Income of subsidiary Net income Retained earnings, 1/1/21 Net Income (above) Dividends declared Retained earnings, 12/31/21 Current assets Investment in Atlanta Land Building Total asset Liabilities Truman $ (811,435) 474,000 (54,565) $ (392,000) $ (919,000) (392,000) 140.000 $(1,171,000) S 579, 410 779,590 478,000 746.000 $ 2,583,000 $ (912,000) Atlanta $ (507,000) 325,000 0 $ (182,000) $ (502,000) (182,000) 90,000 $ (594,000) $ 421,000 0 275,000 $ 1,362,000 $ (448,000) Liabilities Common stock Additional paid-in capital Retained earnings, 12/31/21 Total liabilities and stockholders' equity (912,000) (95,000) (405,000) (1,171,000) $(2,583,000) $ (448,000) (300,000) (20,000) (594,000) $(1,362,000) a. What is the excess fair-value assigned to patent and goodwill? 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 2021? d. 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. Complete this question by entering your answers in the tabs below. Required A Required B Required Required D What is the excess fair-value assigned to patent and goodwill? Patent Goodwill TRUMAN COMPANY AND ATLANTA COMPANY Consolidation Worksheet For Year Ending December 31, 2021 Truman Atlanta Consolidation Entries Company Company Debit Credit $ (811,435) $ (507,000) $ 253,500 474,000 325,000 13,050 162,500 (54,565) 0 54,565 $ (392,000) $ (182,000) Noncontrolling Interest 0 0 0 Consolidated Totals $ (1,064,935) 649,550 Revenues Operating expenses Net income of subsidiary Separate company net income Consolidated net income Net income attributable to NCI Net income attributable to Truman $ 23,385 415,385 23,385 (392,000) $ Retained earnings, 1/1/21 Net income Dividends declared Retained earnings, 12/31/21 $ (919,000) (392,000) 140,000 502,000 0% $ (502,000) (182,000) 90,000 $ (594,000) oo 0 13,500 (919,000) (392,000) 140,000 45,000 $ 1,171,000 0.171.000) Current assets Investment in Atlanta 579,410 779.590 $ 421,000 0 0 % 31.500 0$ 0 1,000,410 0 607,600 502,000 0 Retained earnings. 1/1/21 Net income Dividends declared Retained earnings 12/31/21 $ (919,000) (392,000) 140,000 $ (1,171,000) $ (502,000) (182,000) 90,000 $ (594,000) 0 13.500 000 (919,000) (392,000) 140,000 1,171,000 45,000 $ $ 0X 31,500 579.410 779,590 478,000 746,000 $ 421.000 0 275,000 686,000 607,600 0X 0X 13,050 0X 130,500 Current assets Investment in Atlanta Land Buildings Patent Goodwill Total assets Liabilities Common stock Additional paid in capital Retained earnings, 12/31/21 Noncontrolling interest 7/1 Noncontrolling interest 12/31 Total liabilities and stockholders' equity $ 2.583.000 $ (912,000) (95,000) (405,000) (1,171,000) $ 1,362,000 $ (448,000) (300,000) (20,000) (594,000) 0$ 1.000,410 0 0 753,000 0 1,412.000 0 117.450 0 82.250 $ 3,365, 110 $ (1,360,000) 0 (95,000) 0 (405,000) 0 (1.171,000) (324,225) (314,340) (334,110) 3,365, 110 300,000 20,000 0X 39,150 92,583,000 1,362,000) $ 1,305,115 $ 867,300

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