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 $16,200 Liabilities$245,000 Property and equipment (net) 210,200 Common stock 100,000 Patents 218,600 Retained earnings 100,000 Total $445,000 Total $445,000 On January 1, 2017, Holland assessed the carrying amount of Zeelands equipment (5 year remaining life) to be undervalued by $45,000 Holland also determined that Zeeland possessed unrecorded patents (10 year remaining life) worth $244,800 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 At year end, there were no intra entity receivables or payables Compute the amount of goodwill recognized in Hollands acquisition of Zeeland and the allocation of goodwill to the controlling and noncontrolling interest Show how Holland determined its December 31, 2018, Investment in Zeeland account balance Prepare a worksheet to determine the amounts that should appear on Hollands December 31, 2018, consolidated financial statements $ Sales Cost of goods sold Depreciation expense Amortization expense Other operating expenses Equity in Zeeland earnings Separate company net income Holland (524,100) 265,900 65,500 16,200 60,800 (59,112) (174,812) Zeeland $ (450,500) 211,000 31,800 18,800 56,900 $ $ (132,000) $ Retained earnings 1 1 Net income Dividends declared Retained earnings 12 31 (822,400) (174,812) 50,000 (947,212) $ (355,900) (132,000) 30,000 $ (457,900) $ $ 103,500 Current assets Investment in Zeeland Property and equipment (net) Patents Total assets $ 127,200 594,564 859,000 153,400 $ 1,734,164 281,000 178,500 $ 563,000 $ (466,952) (320,000) $ (5,100) Liabilities Common stock Holland Common stock Zeeland Retained earnings 12 31 Total liabilities and owners equity (947,212) $(1,734,164) (100,000) (457,900) $ (563,000) $ Sales Cost of goods sold Depreciation expense Amortization expense Other operating expenses Equity in Zeeland earnings Separate company net income Holland (524,100) 265,900 65,500 16,200 60,800 (59,112) (174,812) Zeeland $ (450,500) 211,000 31,800 18,800 56,900 $ $ (132,000) $ Retained earnings 1 1 Net income Dividends declared Retained earnings 12 31 (822,400) (174,812) 50,000 (947,212) $ (355,900) (132,000) 30,000 $ (457,900) $ $ 103,500 Current assets Investment in Zeeland Property and equipment (net) Patents Total assets $ 127,200 594,564 859,000 153,400 $ 1,734,164 281,000 178,500 $ 563,000 $ (466,952) (320,000) $ (5,100) Liabilities Common stock Holland Common stock Zeeland Retained earnings 12 31 Total liabilities and owners equity (947,212) $(1,734,164) (100,000) (457,900) $ (563,000)

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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

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 $16,200 Liabilities$245,000

Property and equipment (net) 210,200 Common stock 100,000

Patents 218,600 Retained earnings 100,000

Total $445,000 Total $445,000

On January 1, 2017, Holland assessed the carrying amount of Zeelands equipment (5-year remaining life) to be undervalued by $45,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $244,800. 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:

image text in transcribed

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

Compute the amount of goodwill recognized in Hollands acquisition of Zeeland and the allocation of goodwill to the controlling and noncontrolling interest.
Show how Holland determined its December 31, 2018, Investment in Zeeland account balance.
Prepare a worksheet to determine the amounts that should appear on Hollands December 31, 2018, consolidated financial statements.

$ Sales Cost of goods sold Depreciation expense Amortization expense Other operating expenses Equity in Zeeland earnings Separate company net income Holland (524,100) 265,900 65,500 16,200 60,800 (59,112) (174,812) Zeeland $ (450,500) 211,000 31,800 18,800 56,900 $ $ (132,000) $ Retained earnings 1/1 Net income Dividends declared Retained earnings 12/31 (822,400) (174,812) 50,000 (947,212) $ (355,900) (132,000) 30,000 $ (457,900) $ $ 103,500 Current assets Investment in Zeeland Property and equipment (net) Patents Total assets $ 127,200 594,564 859,000 153,400 $ 1,734,164 281,000 178,500 $ 563,000 $ (466,952) (320,000) $ (5,100) Liabilities Common stock - Holland Common stock - Zeeland Retained earnings 12/31 Total liabilities and owners equity (947,212) $(1,734,164) (100,000) (457,900) $ (563,000) $ Sales Cost of goods sold Depreciation expense Amortization expense Other operating expenses Equity in Zeeland earnings Separate company net income Holland (524,100) 265,900 65,500 16,200 60,800 (59,112) (174,812) Zeeland $ (450,500) 211,000 31,800 18,800 56,900 $ $ (132,000) $ Retained earnings 1/1 Net income Dividends declared Retained earnings 12/31 (822,400) (174,812) 50,000 (947,212) $ (355,900) (132,000) 30,000 $ (457,900) $ $ 103,500 Current assets Investment in Zeeland Property and equipment (net) Patents Total assets $ 127,200 594,564 859,000 153,400 $ 1,734,164 281,000 178,500 $ 563,000 $ (466,952) (320,000) $ (5,100) Liabilities Common stock - Holland Common stock - Zeeland Retained earnings 12/31 Total liabilities and owners equity (947,212) $(1,734,164) (100,000) (457,900) $ (563,000)