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On July 1, 2018, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $767,200 in cash and equity securities. The remaining 30 percent of Atlantas shares traded closely near an average price that totaled $328,800 both before and after Trumans acquisition. In reviewing its acquisition, Truman assigned a $138,500 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 2018. In addition, the subsidiarys income was earned uniformly throughout the year. The subsidiary declared dividends quarterly. Atlanta Truman $ (761,695) (497,000) Revenues Operating expenses Income of subsidiary 489,000 39,305 357,000 Net income $ (312,000 (140,000) Retained earnings, 1/1/18 Net income (above) Dividends declared $ (883,000) (516,000) (140,000) 70,000 $ (1,055,000 (586,000) $ 484,995 433,000 (312,000) 140,000 Retained earnings, 12/31/18 Current assets Investment in Atlanta Land Buildings 782,005 431,000 749,000 Total assets Liabilities Common stock Additional paid-in capital Retained earnings, 12/31/18 233,000 659,000 $ 2,447,000 1,325,000 $ (892,000) (419,000) (300,000) (20,000) (1,855,00)(586,000) $ (2,447,000) (1,325,000) (95,000) (405,000) Total liabilities and stockholders equitya. How did Truman allocate Atlantas 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. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D How did Truman allocate Atlantas acquisition-date fair value to the various assets acquired and liabilities assumed in the combination? Consideration transferred by Truman Noncontrolling interest fair value Atlantas acquisition-date total fair value Book value of Atlanta Fair value in excess of book value Excess fair value assigned: Goodwilla. How did Truman allocate Atlantas 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. Complete this question by entering your answers in the tabs below Required A Required B Required C Required D How did Truman allocate the goodwill from the acquisition across the controlling and noncontrolling interests? Controlling Noncontrolling Interest Interest Goodwila. How did Truman allocate Atlantas 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 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 2018? Initial value at acquisition date Trumans share of Atlantas net income for half year Dividends 2018 Investment account balance 12131/18Prepare 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. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Amounts in the Debit and Credit columns should be entered as positive. Negative amounts for the Noncontrolling Interest and Consolidated Totals columns should be entered with a minus sign.) show less▲ TRUMAN COMPANY AND SUBSIDIARY ATLANTA COMPANY Consolidation Worksheet For Year Ending December 31, 2018 Truman Atlanta Consolidation Entries Noncontrolling Consolidated Company Company Debit Credit 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 S (761,695)S (497,000) 357,000 489,000 (39,305) S (312,000)$ (140,000) Retained earnings, 1/1 Net income Dividends declared Retained earnings 12/31 S (883,000) (516,000) (140,000) 70,000 S (1,055,000) (586,000) (312,000) 140,000 Current assets 484.995433,000Retained earnings, 1/1 Net income Dividends declared Retained earnings 12/31 S (883,000) (516,000) (140,000) 70,000 S (1,055,000) (586,000) (312,000) 140,000 Current assets Investment in Atlanta Land Buildings Patent Goodwill Total assets Liabilities Common stock Additional paid in capital Retained earnings 12/31 Noncontrolling interest 71 Noncontrolling interest 12/31 Total liabilities and equity S 484,995 S 433,000 782,005 431,000 749,000 233,000 659,000 S 2,447,000S 1,325,000 $ (892,000)S (419,000) (300,000) (20,000) (586,000) (95,000) (405,000) (1,055,000) S (2,447,000)S (1,325,000)

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Acquisition date fair value and amortization can be shown as follows: consideration transferred by T Non-controlling interest fair value As acquisition date total fair value Book value of A Fair value in excess ofbook value Excess fair value assigned to specific accounts based on fair value Patent Goodwill Total S720.000 S290,000 $1,010,000 $840,000 $170,000 Remaining annual excess amortizations $20,000 life $100.0005 vears $70,000 indefinite $20,000

Goodwill is the kind of an intangible asset. It arises when one company acquires another one for a premium means they pay extra than the market value of the company Companies now a day are more innovative and investing heavily in favour of the intellectual property and in order to maintain goodwill in the market. Though that doesnt qualify as something that can be mentioned in the balance sheet but they are generating the sales and the revenues for the company. So, they should be mentioned in the balance sheet of the companyIt can be calculated as follows: Goodwill allocation with control premium ControllingNon-controlling interest interest Fair values at acquisition date Relative fair values ofidentifiable net assets 70% and 30% of $940,000 (Acquisition date) book value plus patent-net asset fair value Goodwill $720,000 $290,000 658,000 S62,000 282,000 $8,000Investment account balance can be calculated as follows: 720,000 Initial value at acquis ion date Ts share of As net income for half year(S120,000 amortization x1/2 year) x70% Dividends 2018 ($80,000 x1/2 year x 70%) Investment account balance 12/31/18 $20,000 35,000 -28,000 727,000Consolidated worksheet can be calculated as follows: Adjustments&Eliminations NCI Truman $6,70,000.00$ 4,00,000.00(S) 200,000 $4,02,000.00 2,80,000.00 (E) 10,000 (S) 140,000 $35,000.00 Atlanta Cons 8,70,000.00 ,52,000.00 rating Ex Net income of s ate c 35,000 3,03,000.00 $ -1,20,000.00 net income Consolidated net income Net income attributable to NCI Net income attributable to Truman 3,18,000.00 15,000.00 3,03,000.00 15,000.00 S8,23,000.00-5,00,000.00 (5) 500,000 Retained e Net income (above Dividends declared 8,23,000.00 3,03,000.00 3,03,000.001,20,000.00 $1.45,000.00 80,000.00 $9,81,000.00 S -5,40,000.00 ,90,000.00 (S) 40,000 28,000 12,000.00 45,000.00 9,81,000.00 Retained ear 12/31 S 8 Current assets Investment in Atlanta 4,81,000.00 7,27,000.00 ,71,000.00 D) 28,000 (S) 588,000 35,000 A1) 70,000 A2) 62,000 53,88,000.00$2.00,000.00 $ 7,01,000.00 6,30,000.00 Land Buildi Patent Goodwill Total assets 5,88,000.00 13,31,000.00 90,000.00 70,000.00 29,50,000.00 A1)100,000 A2) 70,000 (E) 10,000 $22,97,000.00 12,20,000.00 Liabilities Common stock Additional paid-in Retained earnings 12/31 Noncontrolling interest 7/1 $8,16,000.00-3,60,000.00 $95,000.00 3,00,000.00(S) 300,000 5 4,05,000.0020,000.00 (S)20,000 $9,81,000.00$-5,40,000.00 11,76,000.00 95,000.00 4,05,000.00 9,81,000.00 ital (Al) 30,000 8,000 S) 252,000 2,90,000.00 Noncontrolling interest 12/31 Total liab, and $2,93,000.00S 93,000.00 9,50,000.00 22,97,000.00 $ -12,20,000.00 $12,63,000.00 $ 12,63,000.00

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