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On January 1, 2020, Allan Company bought a 15 percent interest in Sysinger Company. The acquisition price of $214,500 reflected an assessment that all of Sysinger's accounts were fairly valued within the company's accounting records. During 2020. Sysinger reported net income of $116,100 and declared cash dividends of $34,600. Allan possessed the ability to significantly influence Sysinger's operations and therefore, accounted for this investment using the equity method. On January 1, 2021, Allan acquired an additional 80 percent interest in Sysinger and provided the following fair-value assessments of Sysinger's ownership components: Consideration transferred by Allan for 80% interest Fair value of Allan's 15% previous ownership Noncontrolling interest's 5% fair value Total acquisition-date fair value for Sysi Company $ 1,435,200 269,100 89,700 1,794,000 Also, as of January 1, 2021, Allan assessed a $424.000 value to an unrecorded customer contract recently negotiated by Sysinger. The customer contract is anticipated to have a remaining life of four years. Sysinger's other assets and liabilities were judged to have fair values equal to their book values. Allan elects to continue applying the equity method to this investment for internal reporting purposes. At December 31, 2021, the following financial information is available for consolidation Allan Sysinger Company Company Revenues $ (986,900) $ (488,000) Operating expenses 651,700 246,800 Equity earnings of Sysinger (52,440) Gain on revaluation of Investment in Sysinger to fair value (42,375) Net income $ 430,015 $ 161,200 Retained earnings, January 1 $(962,900) $ (644,800) ALLAN AND SYSINGER Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Accounts Debit Credit Noncontrolling Consolidated Interest Totals Allan Sysinger Company Company $ (986,900) $ (408,000) 651,700 246 800 (52.440) 0 (42,375) 0 $ 430,015 S (161 200) Revenues Operating expenses Equity earnings of Sysinger Gain on revaluation of Investment in Sysinger to fair value Separate company net income Consolidated net income Ni attributable to noncontroling interest Ni attributable to Allan Company Retained earnings, Janua! Net Income Dividonds declared Retained earnings December 31 Current wets Investment in Sysinger (equity method) Property, plant, and equipment Patented technology $ (962,900) S (644 800) (430,015) (161200) 139,700 42,800 $ (1 253 215) S (763 200) 287,300 $ 580,000 1,716,080 0 854000 621000 878,900 389 300 WE, (42,375) 430,015 S (161,200) o $ $ Lymys Gain on revaluation of Investment in Sysinger to fair value Separate company net income Consolidated net income Ni attributable to noncontrolling interest NI attributable to Allan Company Retained earnings, January 1 Net income Dividends declared Retained earnings, December 31 Current assets Investment in Sysinger (equity method) Property, plant, and equipment Patented technology Customer contract Goodwill Total assets Liabilities Common stock Additional paid in capital Retained earnings, December 31 NCI in Sysinger, 1/1 NCI in Sysinger, 12/31 Total liabilities and equities $ (962,900) $ (644,800) (430,015) (161 200) 139,700 42,800 $ (1.253 215) S (763,200) 287,300 $ 580,000 1,716,080 0 854 000 621,000 878,900 389,800 0 0 0 $ 3.736,280 $ 1,590,800 $ (1,342,065) $ (133,600) (927.000) (528,000) (214,000) (166,000) (1,253,215 (763 200) 0 0 0 0 $ (3,736,280) S (1,590,800) S $ 0 0 $ 0
