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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

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 $5.00 per share both before and after the acquisition by Holland. Zeelands acquisition date balance sheet follows:

Current assets $ 14,700 Liabilities $ 222,500
Property and equipment (net) 208,700 Common stock 100,000
Patents 199,100 Retained earnings 100,000
$ 422,500 $ 422,500

On January 1, 2020, Holland assessed the carrying amount of Zeelands 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. 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:

Holland ZeelandSales$(722,400) $(435,500)Cost of goods sold 366,300 203,500 Depreciation expense 90,500 33,300 Amortization expense 14,700 20,300 Other operating expenses 54,800 61,400 Equity in Zeeland earnings (49,146) 0 Separate company net income$(245,246) $(117,000) Retained earnings 1/1$(820,900) $(315,400)Net income (245,246) (117,000)Dividends declared 50,000 30,000 Retained earnings 12/31$(1,016,146) $(402,400) Current assets$125,700 $88,500 Investment in Zeeland 559,332 0 Property and equipment (net) 844,000 266,000 Patents 150,400 154,500 Total assets$1,679,432 $509,000 Liabilities$(343,286) $(6,600)Common stockHolland (320,000) 0 Common stockZeeland 0 (100,000)Retained earnings 12/31 (1,016,146) (402,400)Total liabilities and owners equity$(1,679,432) $(509,000)

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

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

  2. image text in transcribed

Consolidation Entries Consolidated Noncontrolling Interest Accounts Holland Debit Credit Totals $ (722,400) 366,300 90,500 14,700 54,800 Zeeland $ (435,500) 203,500 33,300 20,300 61,400 12,400 22,690 $ (1,157,900) 569,800 136,200 57,690 116,200 0 84,236 X Sales Cost of goods sold Depreciation expense Amortization expense Other operating expenses Equity in Zeeland earnings Separate company net income Consolidated net income Voncontrolling interest in CNI Controlling interest net income Retained earnings 1/1 Vet income Dividends declared (49,146) $ (245,246) $ (117,000) $ (278,020) X 32,764 (245,246) X $ $ (820,900) (245,246) 50,000 $ |(1.016.146) $ (315,400) (117,000) 30,000 315,400 117,000 X (820,900) X (245,246) X Retained earnings 12/31 $ (402,400) $ (820,900) X

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