On January $1,2023,$ 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 $31,2024,$ follow:

Account Holland Zeeland

Sales $ $(640,500)$ $ $(428,500)$

Cost of goods sold $325,000200,000$

Depreciation expense $80,00034,000$

Amortization expense $14,00021,000$

Other operating expenses $52,00063,500$

Equity in Zeeland earnings $(42,300)0$

Separate company net income $ $(211,800)$ $ $(110,000)$

Retained earnings, $1/1$ $ $(820,200)$ $ $(296,500)$

Net income $(211,800)(110,000)$

Dividends declared $50,00030,000$

Retained earnings, $12/31$ $ $(982,000)$ $ $(376,500)$

Current assets $ $125,000$ $ $81,500$

Investment in Zeeland $562,5000$

Property and equipment $($net$)837,000259,000$

Patents $149,000147,500$

Total assets $ $1,673,500$ $ $488,000$

Liabilities $ $(371,500)$ $ $(11,500)$

Common stock$$Holland $(320,000)0$

Common stock$$Zeeland $0(100,000)$

Retained earnings, $12/31(982,000)(376,500)$

Total liabilities and owners' equity $ $(1,673,500)$ $ $(488,000)$

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

Required:

a$1.$ Compute the amount of goodwill recognized in Holland$$s acquisition of Zeeland.

a$2.$ Show the allocation of goodwill to the controlling and noncontrolling interest.

b$.$ Show how Holland determined its December $31,2024,$ Investment in Zeeland account balance.

This is what I have so far:

a$1.$ Goodwill $$140,000$

Controlling Interest Noncontrolling interest

a$2.$ Goodwill allocation

Amount

b$.$ Initial Value $$480,000$

b$.$ Change in Zeeland$$s Retained earnings

b$.$ Excess amortization

b$.$ Investment in Zeeland $$480,000$

c$.$ Prepare a worksheet to determine the amounts that should appear on Holland$$s December $31,2024,$ consolidated financial statements.

HOLLAND CORPORATION AND ZEELAND CORPORATION

Consolidation Worksheet

For Year Ending December $31,2024$

Accounts Holland Zeeland Consolidation Entries Noncontrolling Interest Consolidated Totals

Debit Credit

Sales $$(640,500)$ $$(428,500)$ $$1,069,000$

Cost of goods sold $325,000200,000525,000$

Depreciation expense $80,00034,000$

Amortization expense $14,00021,000$

Other operating expenses $52,00063,500115,500$

Equity in Zeeland earnings $(42,300)0$

Separate company net income $$(211,800)$ $$(110,000)$

Consolidated net income

Noncontrolling interest in consolidated net income

Controlling interest net income $$(211,800)$

Retained earnings, $1/1$ $$(820,200)$ $$(296,500)296,500$ $$(820,200)$

Net income $(211,800)(110,000)$

Dividends declared $50,00030,00018,00012,00050,000$

Retained earnings, $12/31$ $$(982,000)$ $$(376,500)$

Current assets $$125,000$ $$81,500$ $$206,500$

Investment in Zeeland, Incorporated $562,500018,000$

Property and equipment $($net$)837,000259,000$

Patents $149,000147,500$

Goodwill $00$

Total assets $$1,673,500$ $$488,000$

Liabilities $(371,500)(11,500)$

Common stock $(320,000)(100,000)$

Noncontrolling interest

Retained earnings, $12/31(982,000)(376,500)$

Total liabilities and equities $$(1,673,500)$ $$(488,000)$ $$314,500$ $$18,000$