On January 1, 2020, Holland Corporation paid $9 per share to a group of Zeeland Corporation shareholders to acquire 60,000 shares of Zeeland’s outstanding voting stock, representing a 60 percent ownership interest. The remaining 40,000 shares of Zeeland continued to trade in the market close to its recent average of $8.00 per share both before and after the acquisition by Holland. Zeeland’s acquisition date balance sheet follows:

Current assets	$	15,600		Liabilities	$	236,000
Property and equipment (net)		329,600		Common stock		100,000
Patents		210,800		Retained earnings		220,000
	$	556,000			$	556,000

On January 1, 2020, Holland assessed the carrying amount of Zeeland’s equipment (5-year remaining life) to be undervalued by $51,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $419,900. Zeeland’s acquisition-date fair values for its current assets and liabilities were equal to their carrying amounts. Any remaining excess of Zeeland’s acquisition-date fair value over its book value was attributed to goodwill.

The companies’ financial statements for the year ending December 31, 2021, follow:

Sales	$	(594,300	)		$	(444,500	)
Cost of goods sold		301,300				208,000
Depreciation expense		74,500				32,400
Amortization expense		15,600				19,400
Other operating expenses		58,400				58,700
Equity in Zeeland earnings		(44,286	)			0
Separate company net income	$	(188,786	)		$	(126,000	)

Retained earnings 1/1	$	(821,800	)		$	(339,700	)
Net income		(188,786	)			(126,000	)
Dividends declared		50,000				30,000
Retained earnings 12/31	$	(960,586	)		$	(435,700	)

Current assets	$	126,600			$	97,500
Investment in Zeeland		606,792				0
Property and equipment (net)		853,000				275,000
Patents		152,200				167,500
Total assets	$	1,738,592			$	540,000

Liabilities	$	(458,006	)		$	(4,300	)
Common stock—Holland		(320,000	)			0
Common stock—Zeeland		0				(100,000	)
Retained earnings 12/31		(960,586	)			(435,700	)
Total liabilities and owners equity	$	(1,738,592	)		$	(540,000	)

At year-end, there were no intra-entity receivables or payables.

1. Compute the amount of goodwill recognized in Holland’s acquisition of Zeeland and the allocation of goodwill to the controlling and non controlling interest.

2. Show how Holland determined its December 31, 2021, Investment in Zeeland account balance.

3. Prepare a worksheet to determine the amounts that should appear on Holland’s December 31, 2021, consolidated financial statements.