please answer all parts, A-D
On July 1, 2018, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $772,275 in cash and equity securities. The remaining 30 percent of Atlanta's shares traded closely near an average price that totaled $330,975 both before and after Truman's acquisition. In reviewing its acquisition, Truman assigned a $132,000 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 2018. In addition, the subsidiary's income was earned uniformly throughout the year. The subsidiary declared dividends quarterly. Truman Atladta (801,490) (429,000) Operating expenses 454,000 304,000 Income of subsidiary (34,510) Net income (382,000) $ (125,000) Retained earnings, 1/1/18 (900,000) $ (537,000) Net income (above) (382,000) (125,000) 175,000 80,000 Retained earnings, 12/31/18 $(1,107,000) $ (502,000) 563,215 375,000 Investment in Atlanta 778, 785 o 460,000 242,000 Buildings 719,000 696,000 $ 2,521,000 $ 1,313,000 Revenues $ $ 0 $ $ Dividends declared Current assets $ $ Land Total assets 01 AAA An Check my wc current assets Investment in Atlanta Land Buildings Total assets Liabilities Common stock Additional paid-in capital Retained earnings, 12/31/18 Total liabilities and stockholders' equity 563,215 778, 785 460,000 719,000 $ 2,521,000 $ (914,000) (95,000) (405,000) (1,107,000) $(2,521,000) 3/5, VVU 0 242,000 696,000 $ 1,313,000 $ (411,000) (300,000) (20,000) (582,000) $(1,313,000) a. How did Truman allocate Atlanta's acquisition date fair value to the various assets acquired and liabilities assumed in the combination? 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 2018? d. Prepare a worksheet to consolidate the financial statements of these two companies as of December 31, 2018. At year-end, there were no intra-entity receivables or payables. TRUMAN COMPANY AND SUBSIDIARY ATLANTA COMPANY Consolidation Worksheet For Year Ending December 31, 2018 Truman Atlanta Consolidation Entries Company Company Debit Credit $ (801,490) $ (429,000) 454,000 304,000 (34,510) $ (382,000) $ (125,000) Noncontrolling Consolidated 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 $ 0 $ 0 Retained earnings, 1/1 Net income Dividends declared Retained earnings 12/31 $ (900,000) $ (537,000) (382,000) (125,000) 175,000 80,000 $ (1,107,000) $ (582,000) $ 0 375,000 Current assets Investment in Atlanta 563,215 $ 778,785
