On July 1, 2024, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $774,075 in cash and equity securities. The remaining 30 percent of Atlantas shares traded closely near an average price that totaled $313,175 both before and after Trumans acquisition.

In reviewing its acquisition, Truman assigned a $117,500 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 2024. In addition, the subsidiarys income was earned uniformly throughout the year. The subsidiary declared dividends quarterly.

Items	Truman	Atlanta
Revenues	$ (757,375)	$ (527,000)
Operating expenses	472,000	376,000
Income of subsidiary	(44,625)	0
Net income	$ (330,000)	$ (151,000)
Retained earnings, 1/1/24	$ (844,000)	$ (533,000)
Net income (above)	(330,000)	(151,000)
Dividends declared	145,000	60,000
Retained earnings, 12/31/24	$ (1,029,000)	$ (624,000)
Current assets	$ 394,300	$ 357,000
Investment in Atlanta	797,700	0
Land	452,000	267,000
Buildings	773,000	715,000
Total assets	$ 2,417,000	$ 1,339,000
Liabilities	$ (888,000)	$ (395,000)
Common stock	(95,000)	(300,000)
Additional paid-in capital	(405,000)	(20,000)
Retained earnings, 12/31/24	(1,029,000)	(624,000)
Total liabilities and stockholders' equity	$ (2,417,000)	$ (1,339,000)

Required:

How did Truman allocate Atlantas acquisition-date fair value to the various assets acquired and liabilities assumed in the combination?

How did Truman allocate the goodwill from the acquisition across the controlling and noncontrolling interests?

How did Truman derive the Investment in Atlanta account balance at the end of 2024?

How did Truman derive the Investment in Atlanta account balance at the end of 2024?

Initial value at acquisition date
Equity in earnings of Atlanta
Dividends 2024
Investment account balance 12/31/24	$0

Prepare a worksheet to consolidate the financial statements of these two companies as of December 31, 2024. At year-end, there were no intra-entity receivables or payables.

Prepare a worksheet to consolidate the financial statements of these two companies as of December 31, 2024. At year-end, there were no intra-entity receivables or payables.

Note: 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. Input all amounts as positive values.

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TRUMAN COMPANY AND ATLANTA COMPANY
Consolidation Worksheet
For Year Ending December 31, 2024
	Truman Company	Atlanta Company	Consolidation Entries	Noncontrolling Interest	Consolidated Totals
Debit	Credit
Revenues	$(757,375)	$(527,000)
Operating expenses	472,000	376,000
Net income of subsidiary	(44,625)	0
Separate company net income	$(330,000)	$(151,000)
Consolidated net income
Net income attributable to noncontrolling interest
Net income attributable to Truman
Retained earnings, 1/1/24	$(844,000)	$(533,000)
Net income	(330,000)	(151,000)
Dividends declared	145,000	60,000
Retained earnings, 12/31/24	$(1,029,000)	$(624,000)
Current assets	$394,300	$357,000
Investment in Atlanta	797,700	0
Land	452,000	267,000
Buildings	773,000	715,000
Patent
Goodwill
Total assets	$2,417,000	$1,339,000
Liabilities	$(888,000)	$(395,000)
Common stock	(95,000)	(300,000)
Additional paid in capital	(405,000)	(20,000)
Retained earnings, 12/31/24	(1,029,000)	(624,000)
Noncontrolling interest 7/1
Noncontrolling interest 12/31					0
Total liabilities and stockholders equity	$(2,417,000)	$(1,339,000)	$0	$0