Chapter 4, Problem 30P (I Bookmark) Show all steps. Problem On January 1, 2017, Holland Corporation paid $8 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 $6.50 per share both before and after the acquisition by Holland. Zeeland's acquisition date balance sheet follows Current assets Property and equipment (not Patents 14,000 Liabilties 268,000 Common stock 190,000 Retained carnings $212000 100,000 160,000 $472,000 On January 1, 2017, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by $55,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining Iife) worth $285,000. 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 goodwil The companies' tinancial statements for the year ending December 31, 2018, follow Holland Sales Cost of goods sold Depreciation expense Amortization expense Other operating expenses Equity in Zeeland earnings $ (640.500) $428.500 200,000 34,000 21,000 63,500 80,000 14,000 52,000 Separate company net income Retained earrings 1/1 Net income Dividends declared. 5 211.800 $1110.000 $ (820,200) $(296,500 211,800) 110,000) 30,000 50,000 Retained earnings 12/31 Current assets Investment in Zeeland Property and equipment (net $ 125,000 562,500 837.000 149,000 $ 81,500 259,000 147,500 Total assets $ (371,500) 320000) (11,500 Common stock - Holland Common stock - Zeeland Retained earnings 12/31 (100,000) Total labilises and owners equty. At year-end, there were no intra-entity receivables or payables a. Compute the amount of goodwill recognized in Holland's acquisition of Zeeland and the allocation of goodwill to the controlling and noncontrolling interest. b Show how Holland determined its December 31, 2018, Investment in Zeeland account balance. c. Prepare a worksheet to determine the amounts that should appear on Holland's December 31 2018, consolidated financial statements Chapter 4, Problem 30P (I Bookmark) Show all steps. Problem On January 1, 2017, Holland Corporation paid $8 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 $6.50 per share both before and after the acquisition by Holland. Zeeland's acquisition date balance sheet follows Current assets Property and equipment (not Patents 14,000 Liabilties 268,000 Common stock 190,000 Retained carnings $212000 100,000 160,000 $472,000 On January 1, 2017, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by $55,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining Iife) worth $285,000. 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 goodwil The companies' tinancial statements for the year ending December 31, 2018, follow Holland Sales Cost of goods sold Depreciation expense Amortization expense Other operating expenses Equity in Zeeland earnings $ (640.500) $428.500 200,000 34,000 21,000 63,500 80,000 14,000 52,000 Separate company net income Retained earrings 1/1 Net income Dividends declared. 5 211.800 $1110.000 $ (820,200) $(296,500 211,800) 110,000) 30,000 50,000 Retained earnings 12/31 Current assets Investment in Zeeland Property and equipment (net $ 125,000 562,500 837.000 149,000 $ 81,500 259,000 147,500 Total assets $ (371,500) 320000) (11,500 Common stock - Holland Common stock - Zeeland Retained earnings 12/31 (100,000) Total labilises and owners equty. At year-end, there were no intra-entity receivables or payables a. Compute the amount of goodwill recognized in Holland's acquisition of Zeeland and the allocation of goodwill to the controlling and noncontrolling interest. b Show how Holland determined its December 31, 2018, Investment in Zeeland account balance. c. Prepare a worksheet to determine the amounts that should appear on Holland's December 31 2018, consolidated financial statements