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On July 1, 2024, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $772,850 in cash and equity securities.

On July 1, 2024, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $772,850 in cash and equity securities. The remaining 30 percent of Atlanta's shares traded closely near an average price that totaled $312,650 both before and after Truman's acquisition.

In reviewing its acquisition, Truman assigned a $138,000 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 2024. In addition, the subsidiary's income was earned uniformly throughout the year. The subsidiary declared dividends quarterly.

Items Truman Atlanta
Revenues $ (818,160) $ (458,000)
Operating expenses 483,000 348,000
Income of subsidiary (28,840) 0
Net income $ (364,000) $ (110,000)
Retained earnings, 1/1/24 $ (847,000) $ (505,000)
Net income (above) (364,000) (110,000)
Dividends declared 175,000 50,000
Retained earnings, 12/31/24 $ (1,036,000) $ (565,000)
Current assets $ 412,810 $ 392,000
Investment in Atlanta 784,190 0
Land 423,000 216,000
Buildings 760,000 642,000
Total assets $ 2,380,000 $ 1,250,000
Liabilities $ (844,000) $ (365,000)
Common stock (95,000) (300,000)
Additional paid-in capital (405,000) (20,000)
Retained earnings, 12/31/24 (1,036,000) (565,000)
Total liabilities and stockholders' equity $ (2,380,000) $ (1,250,000)

what is the book value for Atlanta, and how was it calculated?

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