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 $422,500 Liabilities Common stock Retained earnings $222,500 100,000 100,000 $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: Holland Sales $ (722,400) Zeeland $(435,500) Cost of goods sold 366,300 203,500 Depreciation expense 90,500 33,300 Amortization expense 14,700 20,300 Other operating expenses 54,800 61,400 Equity in Zeeland earnings (49,146) 0 Separate company net income $ (245,246) $ (117,000) Retained earnings 1/1 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 $ (820,900) (245,246) 50,000 $ (315,400) (117,000) 30,000 $(402,400) $ (1,016,146) $ 125,700 $ 559,332 88,500 0 844,000 266,000 154,500 150,400 $ 1,679,432 $ (343,286) (320,000) $ 509,000 $ (6,600) 0 0 (100,000) (402,400) (1,016,146) $ (1,679,432) $ (509,000) At year-end, there were no intra-entity receivables or payables. HOLLAND CORPORATION AND ZEELAND CORPORATION Consolidation Worksheet For Year Ending December 31, 2021 Sales Accounts 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 Holland Zeeland $ (722,400) $ (435,500) Debit Consolidation Entries Credit Noncontrolling Interest Consolidated Totals $ (1,157,900)| 569,800 136,200 57,690 116,200 366,300 203,500 90,500 33,300 12,400 14,700 20,300 22,690 54,800 61,400 (49,146) 0 49,146 $ (245,246) $ (117,000) $ (820,900) $ (315,400) (245,246) (117,000) 50,000 30,000 315,400 $ (1,016,146) $ (402,400) $ 125,700 $ 88,500 559,332 844,000 150,400 $ 278,010 32,764 32,764 $ 245,246 $ (820,900) (245,246) 50,000 18,000 12,000 $ 214,200 0 559,332 266,000 12,400 154,500 22,690 0 0 131,100 131,100 $ 1,679,432 $ 509,000 (343,286) (6,600) (320,000) (100,000) 100,000 (320,000) (1,016,146) (402,400) Total liabilities and equities $ (1,679,432) $ (509,000) $ 630,736 $ 40,690