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i need the correct answer. On January 1, 2017, Holland Corporation paid $8 per share to a group of Zeeland Corporation shareholders to acquire 60,000
i need the correct answer.
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 $6.00 per share both before and after the acquisition by Holland. Zeeland's acquisition date balance sheet follows: Current assets Property and equipment (net) Patents $ 14,500 248, 500 196,500 $ 459,500 Liabilities Common stock Retained earnings $ 219,500 100,000 140,000 $ 459, 500 On January 1, 2017, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by $60,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $290,600. 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, 2018, follow: $ Sales Cost of goods sold Depreciation expense Amortization expense Other operating expenses Equity in Zeeland earnings Separate company net income Holland (699, 000) 354, 500 87,500 14,500 54, 000 (44, 364) (232, 864) Zeeland $ (433, 500) 202, 500 33, 500 20,500 62,000 $ $ (115, 000) Retained earnings 1/1 Net income Dividends declared Retained earnings 12/31 $ (820, 700) (232, 864) 50,000 $(1,003, 564) $ (310, 000) (115, 000) 30,000 $ (395, 000) $ 86,500 Current assets Investment in Zeeland Property and equipment (net) Patents Total assets $ 125, 500 583, 728 842, 000 150,000 $ 1,701, 228 26000 264, 000 152, 500 503, 000 $ $ (377, 664) (320,000) $ (8,000) Liabilities Common stock - Holland Common stock - Zeeland Retained earnings 12/31 Total liabilities and owners equity (1,003,564) $(1, 701, 228) (100, 000) (395, 000) $ (503, 000) At year-end, there were no intra-entity receivables or payables. Total liabilities and owners equity ${1, 701, 228) $ (503, 000) 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. Answer is not complete. Complete this question by entering your answers in the tabs below. Req A and B Reqc 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. Amount $ 43,760 X a1. Goodwill NCI Controlling Interest 125,640 a2. Goodwill allocation $ $ 169,400 Amount $ 583,728 b. Investment in Zeeland 12/31/18 Req A and B Reqc > Show less Noncontrolling Interest HOLLAND CORPORATION AND ZEELAND CORPORATION Consolidation Worksheet For Year Ending December 31, 2018 Consolidation Entries Holland Zeeland Debit Credit $ (699,000) $ (433,500) 354,500 202,500 87,500 33,500 12,000 14,500 20,500 29,060 54,000 62,000 (44,364) 44,364 $ 232,864) $ (115,000) Consolidated Totals $ (1,132,500) 557,000 133,000 64.060 116,000 Accounts Sales Cost of goods sold Depreciation expense Amortization expense Other operating expenses Equity in Zeeland earnings Separate company net income Consolidated net income Noncontrolling interest in CNI Controlling interest net income Retained earnings, 1/1/18 Net income Dividends declared (29,576) 310,000 $ (820,700) (232,864) 50,000 $ (310,000) (115,000) 30,000 $ (395,000) $ 86,500 $ (262,440) 29,576 $ 232,864) $ (820,700) (232,864) 50,000 $ (1,003,564) $ 212,000 18,000 12,000 Retained earnings, 12/31 553,728 X (1,003,564) $ 125,500 583,728 842,000 150,000 18,000 48,000 261,540 129,400 12,000 29,060 Current assets Investment in Zeeland, Inc Property and equipment (net) Patents Goodwill Total assets Liabilities Common stock Noncontrolling interest Retained earnings, 12/31 Total liabilities and equities 264,000 152,500 0 $ 503,000 (8,000) (100,000) 1,142,000 534,980 129,400 2,018,380 (385,664) (320,000) $ $ 1,701,228 (377,664) (320,000) 100,000 339,576 (339,576) (1,003,564) |(1,701,228) (395,000) $ (503,000) (1,003,564) (1,709,228) $ 952,364 $ 952,364 $Step by Step Solution
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