On January 1, 2017, Holland Corporation paid $9 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 $7.50 per share both before and after the acquisition by Holland. Zeeland's acquisition date balance sheet follows: Current assets Property and equipment (net) Patents $ 16,500 310,500 222,500 $ 549,500 Liabilities Common stock Retained earnings $ 249,500 100,000 200,000 $ 549,500 On January 1, 2017, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by $42,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $398,900. 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 (489,000) 248, 200 61,000 16,500 62,000 (52,026) (153,326) Zeeland $ (453,500) 212,500 31,500 18,500 56,000 $ $ (135,000) Retained earnings 1/1 Net income Dividends declared Retained earnings 12/31 $ (822,700) (153,326) 50,000 $ (926,026) $ (364,000) (135,000) 30,000 $ (469,000) $ 106,500 Current assets Investment in Zeeland Property and equipment (net) Patents Total assets $ 127,500 643,452 862,000 154,000 $ 1,786,952 284,000 181,500 572,000 $ $ (540,926) (320,000) $ (3,000) Liabilities Common stock - Holland Common stock - Zeeland Retained earnings 12/31 Total liabilities and owners equity (926,026) $(1,786,952) (100,000) (469,000) $ (572,000) At year-end, there were no intra-entity receivables or payables. 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. c. Prepare a worksheet to determine the amounts that should appear on Holland's December 31, 2018, consolidated financial statements. Complete this question by entering your answers in the tabs below. Reg A and B Reg C 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 NCI a2. Goodwill allocation Amount b. Investment in Zeeland 12/31/18 Prepare a worksheet to determine the amounts that should appear on Holland's December 31, 2018, consolidated financial statements. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Amounts in the Debit and Credit columns should be entered as positive. Negative amounts for the Noncontrolling Interest and Consolidated Totals columns should be entered with a minus sign.) Show less Noncontrolling Interest Consolidated Totals HOLLAND CORPORATION AND ZEELAND CORPORATION Consolidation Worksheet For Year Ending December 31, 2018 Consolidation Entries Holland Zeeland Debit Credit S (489,000) S (453,500) 248,200 212,500 61,000 31,500 16,500 18,500 62,000 56,000 (52,026) $ (153,326) $ (135,000) 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 0 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 $ (822,700) $ (364,000) (153,326) (135,000) 50,000 30,000 $ (926,026) $ (469,000) $ 127,500 $ 106,500 643,452 862,000 284,000 154,000 181,500 001 $ 1,786,952 S 572,000 (540,926) (3,000) (320,000) (100,000) (926,026) (469,000) (1,786,952) S (572,000) Total liabilities and equities