On January 1, 2020, 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 $6.00 per share both before and after the acquisition by Holland. Zeelands acquisition date balance sheet follows:

On January 1, 2020, Holland assessed the carrying amount of Zeelands equipment (5-year remaining life) to be undervalued by $67,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $283,900. 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, 2021, follow:

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

1. Compute the amount of goodwill recognized in Hollands acquisition of Zeeland and the allocation of goodwill to the controlling and noncontrolling interest.

2. Show how Holland determined its December 31, 2021, Investment in Zeeland account balance.

3. Prepare a worksheet to determine the amounts that should appear on Hollands December 31, 2021, consolidated financial statements.

4. 

5. 

Current assets Property and equipment (net) Patents $230,000 100,000 $ 15,200 Liabilities 249,200 Common stock Retained 205,600 earnings $470,000 140,000 $ 470,000 $ Sales Cost of goods sold Depreciation expense Amortization expense Other operating expenses Equity in Zeeland earnings Separate company net income Holland Zeeland (780,900) ${440,500) 395,800 206,000 98,000 32,800 15, 200 19,800 56,800 59,900 (48,126) 0 (263,226) $(122,000) $ Retained earnings 1/1 Net income Dividends declared Retained earnings 12/31 $ (821,400) $1328,900) (263, 226) (122,000) 50,000 30,000 $(1,034, 626) ${420,900) Current assets Investment in Zeeland Property and equipment (net) Patents Total assets $ 126,200 538,392 849,000 151,400 $ 1,664,992 $ 93,500 0 271,000 159,500 $ 524,000 Liabilities Common stock-Holland Common stock-Zeeland Retained earnings 12/31 Total liabilities and owners equity $ (310,366) $ (3,100) (320,000) 0 0 (100,000) (1,034,626) (420,900) $(1,664,992) $(524,000) Amount a1. Goodwi Controlling Interest NCI a2 Goodwill allocation Amount b. Initial Value Change in Zeeland's RE Excess amortization Investment in Zeeland $ 0 olololo 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 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 HOLLAND CORPORATION AND ZEELAND CORPORATION Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Noncontrolling Consolidated Holland Zeeland Debit Credit Interest Totals S (780.000) $ (440,500) $ (1,221,400) 395,800 208.000 601,800 98,000 32.800 13.400 144.200 15,200 10.800 28,390 63,390 50.800 59.900 116.700 (48,128) 0 48.126 0 $ (263.228) $ (122,000) S (295,310) (32.084) 32.084 S (263,228 S (821,400) $ (328,900) 320.800 $ (821,400) (263,226) (122,000) (283,226) 50.000 30.000 18.000 12.000 50.000 IS (1,034,628) S (420,000) $ (1.034.828) $ 128,200 $ 93.500 s 219,700 638,392 0 18.000 556,382 849,000 271.000 53.600 13.400 1,160,200 151,400 159.500 255.510 28.390 539.020 $ 0 0 69,100 69.100 $ 1,664,992 $ 524.000 $ 1,987,020 (310,366) (3.100) (313.466) (320,000) (100,000) 100.000 (320,000) 298,844 298,844 (318,928) (1,034,628) (420,000) (1.034,628) S (524,000) (1.664.992) $ 908,928 $ 915.026 $ (1.987,020)