On January 1, 2017, Holland Corporation paid $7 per share to a group of Zeeland Corporation shareholders to acquire 60,000 shares of Zeelands 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 $5.00 per share both before and after the acquisition by Holland. Zeelands acquisition date balance sheet follows:

Current assets	$	15,000		Liabilities	$	227,000
Property and equipment (net)		209,000		Common stock		100,000
Patents		203,000		Retained earnings		100,000
	$	427,000			$	427,000

On January 1, 2017, Holland assessed the carrying amount of Zeelands equipment (5-year remaining life) to be undervalued by $65,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $226,600. Zeelands acquisition-date fair values for its current assets and liabilities were equal to their carrying amounts. Any remaining excess of Zeelands acquisition-date fair value over its book value was attributed to goodwill.

The companies financial statements for the year ending December 31, 2018, follow:

	Holland				Zeeland
Sales	$	(757,500	)		$	(438,500	)
Cost of goods sold		384,000				205,000
Depreciation expense		95,000				33,000
Amortization expense		15,000				20,000
Other operating expenses		56,000				60,500
Equity in Zeeland earnings		(50,604	)			0
Separate company net income	$	(258,104	)		$	(120,000	)
Retained earnings 1/1	$	(821,200	)		$	(323,500	)
Net income		(258,104	)			(120,000	)
Dividends declared		50,000				30,000
Retained earnings 12/31	$	(1,029,304	)		$	(413,500	)
Current assets	$	126,000			$	91,500
Investment in Zeeland		565,308				0
Property and equipment (net)		847,000				269,000
Patents		151,000				157,500
Total assets	$	1,689,308			$	518,000
Liabilities	$	(340,004	)		$	(4,500	)
Common stock - Holland		(320,000	)			0
Common stock - Zeeland		0				(100,000	)
Retained earnings 12/31		(1,029,304	)			(413,500	)
Total liabilities and owners equity	$	(1,689,308	)		$	(518,000	)

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

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 a1. Goodwill Controlling Interest a2. Goodwill allocation Amount b. Investment in Zeeland 12/31/18 Noncontrolling Interest Consolidated Totals Consolidation Worksheet For Year Ending December 31, 2018 Consolidation Entries Holland Zeeland Debit Credit $ (757,500) $ (438,500) 384,000 205,000 95,000 33,000 15,000 20,000 56,000 60,500 (50,604) $ (258,104) $ (120,000) 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 Retained earnings, 12/31 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 $ (821,200) (258,104) 50,000 $ (1,029,304) $ 126,000 565,308 847,000 151,000 $ (323,500) (120,000) 30,000 $ (413,500) $ 91,500 269,000 157,500 O $ 1,689,308 $ (340,004) (320,000) 518,000 (4,500) (100,000) (1,029,304) $ (1,689,308) (413,500) (518,000) $ $ 0 $ 0 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 a1. Goodwill Controlling Interest a2. Goodwill allocation Amount b. Investment in Zeeland 12/31/18 Noncontrolling Interest Consolidated Totals Consolidation Worksheet For Year Ending December 31, 2018 Consolidation Entries Holland Zeeland Debit Credit $ (757,500) $ (438,500) 384,000 205,000 95,000 33,000 15,000 20,000 56,000 60,500 (50,604) $ (258,104) $ (120,000) 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 Retained earnings, 12/31 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 $ (821,200) (258,104) 50,000 $ (1,029,304) $ 126,000 565,308 847,000 151,000 $ (323,500) (120,000) 30,000 $ (413,500) $ 91,500 269,000 157,500 O $ 1,689,308 $ (340,004) (320,000) 518,000 (4,500) (100,000) (1,029,304) $ (1,689,308) (413,500) (518,000) $ $ 0 $ 0