On January 1, 2020, 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 $ 14,700 208,700 199,100 Liabilities Common stock Retained earnings $ 222,500 100,000 100,000 $ 422,500 $ 422,500 On January 1, 2020, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by $62,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $226,900. 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, 2021, follow: Zeeland Sales Cost of goods sold Depreciation expense Amortization expense. Holland $ (722,400) 366,300 $ (435,500) 203,500 90,500 33,300 14,700 20,300 Other operating expenses. Equity in Zeeland earnings 54,800 (49,146) 61,400 0 Separate company net income $ (245,246) $ (117,000) Retained earnings 1/1 $ (820,900) Net income Dividends declared Retained earnings 12/31 Current assets Investment in Zeeland Property and equipment (net) Patents Total assets Liabilities Common stock-Holland Common stock-Zeeland Retained earnings 12/31 Total liabilities and owners equity (245,246) 50,000 $ (1,016,146) $ (315,400) (117,000) 30,000 $ (402,400) $ 125,700 $ 559,332 844,000 150,400 $ 1,679,432 88,500 266,000 154,500 $ 509,000 $ (343,286) $ (6,600) (320,000) 0 0 (100,000) (402,400) $ (1,679,432) $ (509,000) (1,016,146) 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, 2021, Investment in Zeeland account balance. c. Prepare a worksheet to determine the amounts that should appear on Holland's December 31, 2021, consolidated financial statements. Req A and B Req 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, 2021, Investment in Zeeland account balance. (Negative amounts should be shown with a minus sign.) a1. Goodwill Amount $ 131,100 Controlling Interest NCI a2. Goodwill allocation $ 4,440 b. Initial Value Change in Zeeland's RE Excess amortization Investment in Zeeland Req A and B Req C Amount $ 420,000 181,440 (42,108) $ 559,332 Show less Prepare a worksheet to determine the amounts that should appear on Holland's December 31, 2021, 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. Input all amounts as positive values.) Show less HOLLAND CORPORATION AND ZEELAND CORPORATION Consolidation Worksheet For Year Ending December 31, 2021 Accounts Holland Zeeland Debit Consolidation Entries Credit Noncontrolling Interest Consolidated Totals 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 $ (245,246) $ (117,000) $ (722,400) $ (435,500) $ (1,157,900) 366,300 203,500 569,800 90,500 33,300 12,400 136,200 14,700 20,300 22,690 57,690 54,800 61,400 116,200 (49,146) 0 49,146 Retained earnings 1/1 Net income Dividends declared $ (820,900) $ (315,400) (245,246) 50,000 315,400 (117,000) 30,000 18,000 12,000 $ (278,010) 32,764 32,764 $ (245,246) $ (820,900) (245,246) 50,000 Retained earnings 12/31 $ (1,016,146) $ (402,400) $ (1,016,146) Current assets 125,700 $ 88,500 Investment in Zeeland, Inc 559,332 0 18,000 577,332 Property and equipment (net) 844,000 266,000 49,600 12,400 Patents 150,400 154,500 204,210 22,690 Goodwill 0 0 211,100 $ 214,200 1,147,200 486,420 211,100 Total assets Liabilities Common stock Noncontrolling interest Retained earnings 12/31 $ 1,679,432 $ 509,000 (343,286) (320,000) (6,600) (349,886) (100,000) 100,000 (320,000) 352,124 (352,124) (327,978) (1,016,146) (402,400) (1,016,146) Total liabilities and equities $ (1,679,432) $ (509,000) $ 982,546 $ 982,546 $ (2,014,010)