On July 1, 2021, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $785,225 incash and equity securities. The remaining 30 percent of Atlanta's shares traded closely near an average price that totaled $336,525both before and after Truman's acquisition.In reviewing its acquisition, Truman assigned a $128.500 fair value to a patent recently developed by Atlanta, even though it was notrecorded within the financial records of the subsidiary. This patent is anticipated to have a remaining life of five years.The following financial information is available for these two companies for 2021. In addition, the subsidiary's income was earneduniformly throughout the year. The subsidiary declared dividends quarterly.RevenuesOperating expensesIncome of subsidiaryNet incomeRetained earnings, 1/1/21Net income (above)Dividends declaredRetained earnings, 12/31/21Current assetsInvestment in AtlantaLandBuildingsTotal assetsLiabilitiesCommon stockAdditional paid-in capitalRetained earnings, 12/31/21Total liabilities and stockholders' equityRevenuesOperating expensesNet income of subsidiarySeparate company net incomeConsolidated net incomeNet income attributable to NCINet income attributable to TrumanRetained earnings, 1/1/21Net incomeDividends declaredRetained earnings, 12/31/21Current assetsInvestment in Atlanta$LandBuildingsPatentGoodwillTotal assetsLiabilitiesCommon stockAdditional paid in capitalRetained earnings, 12/31/21Noncontrolling interest 7/1$$Complete this question by entering your answers in the tabs below.Noncontrolling interest 12/31Total liabilities and stockholders' equity$Truman(726,645)473,000(61,355)(315,000) $(201,000)(875,000) $ (530,000)(315,000)(201,000)160,00090,000$(1,030,000)(641,000)484,000a. What is the excess fair-value assigned to patent and goodwill?b. How did Truman allocate the goodwill from the acquisition across the controlling and noncontrolling interests?c. How did Truman derive the Investment in Atlanta account balance at the end of 2021?d. Prepare a worksheet to consolidate the financial statements of these two companies as of December 31, 2021. At year-end, therewere no intra-entity receivables or payables.S$$ (902,000) $(95,000)(405,000)(1,030,000)$ (2,432,000)Required A Required B Required C Required DPrepare a worksheet to consolidate the financial statements of these two companies as of December 31, 2021. At year-end, there were no intra-entity receivablesor payables. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit columnof 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 positivevalues.)$396,920 $815,080457,000232,000763,000649,0002,432,000 $ 1,285,000Atlanta$ (571,000)370,000S (726,645) S (571,000) $370,000473,000(61,355)$ (315,000) $ (201,000)S (875,000) $ (530,000)(315,000)160,000(201,000)90,000S (1,030,000) S (641,000)(95,000)(405,000)(1,030,000)TRUMAN COMPANY AND ATLANTA COMPANYConsolidation WorksheetFor Year Ending December 31, 2021TrumanAtlantaCompanyCompany0396,920 $ 404,000815,080457,000763,000232,000649,000$ 2,432,000 s 1,285,000S (902,000) $ (324,000)08< Required C(300,000)(20,000)(641,000)(20,000)(641,000)$(1,285,000)8(324,000)(300,000)S (2,432,000) $ (1,285,000) $DebitConsolidation EntriesCredit285,50012,85061,355530,000889,705$Required D185,00076,500261,500Noncontrolling ConsolidatedInterestTotals(26,295)13,500(39,795)S (1,012,145)670,850SS(341,295)26,295315,000(875,000)(315,000)160,000$ (1,030,000)S 800,920Show less A

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On July 1, 2021, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $785,225 in cash and equity securities. The remaining 30 percent of Atlanta's shares traded closely near an average price that totaled $336,525 both before and after Truman's acquisition. In reviewing its acquisition, Truman assigned a $128.500 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 2021. In addition, the subsidiary's income was earned uniformly throughout the year. The subsidiary declared dividends quarterly.

On July 1, 2021, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $785,225 in cash and equity securities. The remaining 30 percent of Atlanta's shares traded closely near an average price that totaled $336,525 both before and after Truman's acquisition. In reviewing its acquisition, Truman assigned a $128.500 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 2021. In addition, the subsidiary's income was earned uniformly throughout the year. The subsidiary declared dividends quarterly.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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