Need the amounts marked with an X
On January 1, 2020, 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 (net) Patents $ 14,000 268,000 190,000 $ 472,000 Liabilities Common stock Retained earnings $ 212,000 100,000 160,000 $ 472,000 On January 1, 2020, 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 life) 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 goodwill. The companies' financial statements for the year ending December 31, 2021, follow: Sales Cost of goods sold Depreciation expense Amortization expense Other operating expenses Equity in Zeeland earnings Separate company net income Holland $ (640,500) 325,000 80,000 14,000 52,000 (42,300) $ (211,800) Zeeland $ (428,500) 200,000 34,000 21,000 63,500 0 $(110,000) Retained earnings 1/1 Net income Dividends declared Retained earnings 12/31 $ (820, 200) (211,800) 50,000 $ (982,000) $ (296,500) (110,000) 30,000 $ (376,500) Current assets Investment in Zeeland Property and equipment (net) Patents Total assets $ 125,000 562,500 837,000 149,000 $ 1,673,500 $ 81,500 0 259,000 147,500 $ 488,000 $ (371,500) (320,000) Liabilities Common stock-Holland Common stock-Zeeland Retained earnings 12/31 Total liabilities and owners equity $ (11,500) 0 (100,000) (376,500) $ (488,000) (982,000) $(1,673,500) At year-end, there were no intra-entity receivables or payables. b. Show how Holland determined its December 31, 2021, Investment in Zeeland account balance. c. Prepare a worksheet to determine the amounts that should appear on Holland's December 31, 2021, consolidated financial statements. Consolidated Noncontrolling Interest Accounts Totals Sales HOLLAND CORPORATION AND ZEELAND CORPORATION Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Holland Zeeland Debit Credit $ (640,500) $ (428,500) 325,000 200,000 80,000 34,000 11,000 14,000 21,000 28,500 52,000 63,500 (42,300) 0 42,300 $ (211,800) $ (110,000) $ (1,069,000) 525,000 125,000 63,500 115,500 0 28,200 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 Net income Dividends declared Retained earnings 12/31 Current assets Investment in Zeeland, Inc Property and equipment (net) Patents Goodwill Total assets $ 296,500 $ (820,200) (211,800) 50,000 (982,000) 18,000 12,000 $ $ (820,200) $ (296,500) (211,800) (110,000) 50,000 30,000 (982,000) $ (376,500) 125,000 $ 81,500 562,500 0 837,000 259,000 149,000 147,500 $ $ 206,500 18,000 44,000 256,500 140,000 580,500 11,000 28,500 0 0 1,129,000 524,500 140,000 2,000,000 (383,000) (320,000) $ 1,673,500 $ 488,000 $ Liabilities (371,500) (320,000) (11,500) (100,000) 100,000 298,800X Common stock Noncontrolling interest Retained earnings 12/31 Total liabilities and equities (982,000) (376,500) $ (1,673,500) $ (488,000) $ (982,000) $ 2,000,000) 936,800 $ 936,800
