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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 equityPrepare 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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1) Calculation of Book Value of Atlanta as on 07/01/18 (i.e. at the date of Acquisition) Retained Earnings as on 01/01/18 Add: Net Income for the Half year (140,000/2) Less: Dividend paid for the Half year (70,000/2) Retained Earnings as on 07/01/18 516,000 70,000 35,000) 551,000 Calculation of Atlanta Book Value as on 07/01/18 Common Stock Additional Paid in capital Retained Earnings as on 07/01/18 Book Value as on 07/01/18 300,000 20,000 551,000 871,000 Consideration transferred by Truman Fair value of Non Controlling Interest Fair value of Altanta Less: Book Value of Atlant Fair value in excess of Book Value Excess fair value assigned Patents Goodwill (Balance) (225,000 138,500) 767,200 328,800 1,096,000 (871,000) 225,000 138,500 86,500 Calculation of Amortization Expenses Amortization expense Amortization expense for Value Assigned (a) Life (b) for the year [c] (a/b) half year (c/2) Patents Goodwill Total 138,500 27,700 13,850 86,500 NA 225,000 27,700 13,850TRUMAN COMPANY AND SUBSIDIARY ATLANTA COMPANY Consolidation worksheet For Year Ending December 31, 2018 Adiustment Entries Atlanta (761,695) (497,000) [s] 489,000 357,000 [el Truman Debit Credit NCI Consolidated Totals 1,010,19!5 681,350 Revenues Operating Expenses Income of Subsidiary Separate company Net Income Consolidated Net Income Net Income attributable to NCI Net Income attributable to Truman 248,500 13,850 39,305 178,500 [s] (39,305) (312,000)(140,000 Lil 328,845 16,845 (312,000) (16,845) Retained Earnings 1/1 Net Income (above) Dividends declared (883,000) (516,000)[s] (312,000) (140,000) 516,000 883,000 312,000 140,000 24,500 [d] 35,00 [s 140,000 70,000 10,500 Retained Earnings 12/31 1,055,000(586,000) (1,055,000)Current Assets 484,995 782,005 433,000 917,995 Investment in Atlanta 39,305 i] 609,700s 157,500 [a 24,500 Land Buildings Patents Goodwill Total Assets 431,000 749,000 233,000 659,000 664,000 1,408,000 124,650 86,500 3,201,145 [al 13,850 [e] 138,500 86,500 2,447,000 1,325,000 Liabilities Common Stock Additional paid in capital Retained Earnings 12/31 Non Controlling Interest 07/01 (892,000) (419,000) (1,311,000) (95,000) (405,000) (1,055,000) (95,000) (300,000) [s] 405,000 300,000 20,000 (20,000) [s] (1,055,000(586,000) 261,300s 67,500 a (328,800) (335,145) Non Controlling Interest 12/31 Total liabilities and Equity (335,145) (3,201,145) (2,447,000) (1,325,000) 1,387,15!5 1,387,15!5Entries Explanation [i] is to remove the income from subsidiary by eliminating the Investment Balance [d] is to remove the dividend declared by the Atlanta for the half year (70,000/2) [s] is to remove stockholders equity by reducing the revenue and expenses to half of Atlanta as on 07/01/18 and allocating to NCI Retained Earnings 01/01/18 Common Stock Additional Paid in Capital Revenues (497,000/2) Operating expense (357,000/2) Dividends half year (70,000/2) Stockholders Equity as on 12/31/18 Parent Share (871,000 * 70%) NCI (871,000 * 30%) [a] is to record the excess value assigned to specific account as on 07/01/18 [e] is to record the amortization expenses on patent for the half year 516,000 300,000 20,000 248,500 (178,500) (35,000) 871,000 609,700 261,300Consolidated Worksheet After combining Multiple Debit and Credit in One column TRUMAN COMPANY AND SUBSIDIARY ATLANTA COMPANY Consolidation worksheet For Year Ending December 31, 2018 Consolidation Entries Atlanta Debit Consolidated Totals (1,010,195) 681,350 Truman Credit NCI (761,695) 489,000 (39,305 497,000) 357,000 Revenues Operating Expenses Income of Subsidiary Separate company Net Income Consolidated Net Income Net Income attributable to NCI Net Income attributable to Truman 248,500 13,850 39,305 178,500 (312,000)(140,000) 328,845 16,845 (312,000) (16,845) Retained Earnings 1/1 Net Income (above) Dividends declared Retained Earnings 12/31 516,000 (140,000) 70,000 1,055,000)(586,000) (883,000) 312,000) 140,000 516,000 883,000 312,000 140,000 (1,055,000) 59,500 10,500Current Assets Investment in Atlanta Land Buildings Patents Goodwill Total Assets 484,995 782,005 431,000 749,000 433,000 917,995 24,500 806,505 233,000 659,000 664,000 1,408,000 124,650 86,500 3,201,145 138,500 86,500 13,850 2,447,000 1,325,000 Liabilities Common Stock Additional paid in capital Retained Earnings 12/31 Non Controlling Interest 07/01 Non Controlling Interest 12/31 Total liabilities and Equity 892,000 95,000 405,000 1,055,000 419,000 300,000 20,000 586,000 (1,311,000) (95,000) (405,000) (1,055,000) 300,000 20,000 (328,800) (335,145) 328,800 (335,145) (3,201,145) (2,447,000)(1,325,000)1, 1,387,15!5 1,387,15!5

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