steps and result
On July 1, 2021, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $800,450 in cash and equity securities. The remaining 30 percent of Atlanta's shares traded closely near an average price that totaled $343,050 both before and after Truman's acquisition. In reviewing its acquisition, Truman assigned a $122,500 fair value to a patent recently developed by Atlanta, even though it was not recorded within the nancial 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. Truman Atlanta Revenues $ (699,075) $ (459,000) Operating expenses 423,000 309,000 Income of subsidiary (43,925) 0 Net income $ (320,000) $ (150,000) Retained earnings, 1/1/21 $ (887,000) $ (573,000) Net income (above) (320,000) (150,000) Dividends declared 150,000 60,000 Retained earnings, 12/31/21 $(1,057,000) $ (663,000) Current assets $ 407,625 $ 441,000 Investment in Atlanta 823,375 0 Land 477,000 282,000 Buildings 738,000 683,000 Total assets $ 2,446,000 $ 1,406,000 Liabilities $ (889,000) $ (423,000) Common stock (95,000) (300,000) Additional paid-in capital (405,000) (20,000) Retained earnings, 12/31/21 (1,057,000) (663,000) Total liabilities and stockholders' equity $(2,446,000) $(1,406,000) 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.\fComplete this question by entering your answers in the tabs below. - - How did Truman allocate the goodwill from the acquisition across the controlling and noncontrolling interests? __ Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D How did Truman derive the Investment in Atlanta account balance at the end of 2021? Initial value at acquisition date Equity in earnings of Atlanta Dividends 2021 Investment account balance 12/31/21 $ 0Revenues $ (699,075) Consolidated net income Operating expenses 423,000 Net income of subsidiary (43,925) Separate company net income $ (320,000) (150,000) Net income attributable to NCI Net income attributable to Truman Retained earnings, 1/1/21 Net income $ (887,000) (320,000) (573,000) (150,000) Dividends declared 150,000 60,000 Retained earnings, 12/31/21 $ (1,057,000) $ (663,000) Current assets $ 407,625 $ Total assets Investment in Atlanta 823,375 Land 477,000 Buildings 738,000 Patent Goodwill $ 2,446,000 $ 1,406,000 Liabilities $ (889,000) $ (423,000) (4ss,ooo)____ Liabilities $ (889,000) $ (423,000) Common stock (95,000) (300,000) Additional paid in capital (405,000) (20,000) Retained earnings, 12/31/21 (1,057,000) (663,000) Noncontrolling interest 7/1 Noncontrolling interest 12/31 0 Total liabilities and stockholders' equity $ (2,446,000) $ (1,406,000) $ 0 0