On July 1, 2021, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $809,550 in cash and equity securities. The remaining 30 percent of Atlantas shares traded closely near an average price that totaled $346,950 both before and after Trumans acquisition. In reviewing its acquisition, Truman assigned a $126,000 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 2021. In addition, the subsidiarys income was earned uniformly throughout the year. The subsidiary declared dividends quarterly. Truman Atlanta Revenues $ (725,470 ) $ (476,000 ) Operating expenses 414,000 315,000 Income of subsidiary (47,530 ) 0 Net income $ (359,000 ) $ (161,000 ) Retained earnings, 1/1/21 $ (916,000 ) $ (568,000 ) Net income (above) (359,000 ) (161,000 ) Dividends declared 140,000 70,000 Retained earnings, 12/31/21 $ (1,135,000 ) $ (659,000 ) Current assets $ 515,420 $ 338,000 Investment in Atlanta 832,580 0 Land 397,000 294,000 Buildings 755,000 662,000 Total assets $ 2,500,000 $ 1,294,000 Liabilities $ (865,000 ) $ (315,000 ) Common stock (95,000 ) (300,000 ) Additional paid-in capital (405,000 ) (20,000 ) Retained earnings, 12/31/21 (1,135,000 ) (659,000 ) Total liabilities and stockholders' equity $ (2,500,000 ) $ (1,294,000 ) What is the excess fair-value assigned to patent and goodwill? 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 2021? 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..

1. On July 1, 2021, Truman Company acquired a 70 percent interest in Atlanta Company in
exchange for consideration of $809,550 in cash and equity securities. The remaining 30 percent of
Atlantas shares traded closely near an average price that totaled $346,950 both before and after
Trumans acquisition. In reviewing its acquisition, Truman assigned a $126,000 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 2021. In addition, the subsidiarys
income was earned uniformly throughout the year. The subsidiary declared dividends quarterly.
Truman Atlanta Revenues $ (725,470 ) $ (476,000 ) Operating expenses 414,000 315,000 Income
of subsidiary (47,530 ) 0 Net income $ (359,000 ) $ (161,000 ) Retained earnings, 1/1/21 $
(916,000 ) $ (568,000 ) Net income (above) (359,000 ) (161,000 ) Dividends declared 140,000
70,000 Retained earnings, 12/31/21 $ (1,135,000 ) $ (659,000 ) Current assets $ 515,420 $
338,000 Investment in Atlanta 832,580 0 Land 397,000 294,000 Buildings 755,000 662,000 Total
assets $ 2,500,000 $ 1,294,000 Liabilities $ (865,000 ) $ (315,000 ) Common stock (95,000 )
(300,000 ) Additional paid-in capital (405,000 ) (20,000 ) Retained earnings, 12/31/21 (1,135,000 )
(659,000 ) Total liabilities and stockholders' equity $ (2,500,000 ) $ (1,294,000 )
What is the excess fair-value assigned to patent and goodwill?
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 2021?
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.