On January 1, 2017, Holland Corporation paid $7 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 $5.00 per share both before and after the acquisition by Holland. Zeeland's acquisition date balance sheet follows: Current assets Property and equipment (net) Patents $ 16,200 Liabilities 210,200 Common stock 218,600 Retained earnings $ 445,000 $ 245,000 100,000 100,000 $ 445,000 On January 1, 2017, Holland assessed the carrying amount of Zeeland's 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. 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 $ (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) $ (355,900) (174,812) (132,000) 50,000 30,000 $ (947,212) $ (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 Liabilities Common stock - Holland Common stock - Zeeland Retained earnings 12/31 Total liabilities and owners equity $ (466, 952) $ (5,100) (320,000) 0 (100,000) (947,212) (457,900) $(1,734,164) $ (563,000)