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 $5.50 per share both before and after the acquisition by Holland. Zeeland's acquisition date balance sheet follows: Current assets Property and equipment (net) Patents $ 14,600 228,600 197,800 $ 441,000 Liabilities Common stock Retained earnings $ 221,000 100,000 120,000 $ 441,000 On January 1, 2020, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by $61,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $258,300. 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: $ Sales Cost of goods sold Depreciation expense Amortization expense Other operating expenses Equity in Zeeland earnings Separate company net income Holland (710,700) 360,400 89,000 14,600 54,400 (46,782) (239,082) Zeeland $ (434,500) 203,000 33,400 20,400 61,700 0 $ (116,000) $ Retained earnings 1/1 Net income Dividends declared Retained earnings 12/31 $ (820,800) (239,082) 50,000 $(1,009,882) $ (312,700) (116,000) 30,000 $ (398,700) Current assets Investment in Zeeland Property and equipment (net) Patents $ 125,600 541,584 843,000 150,200 $ 1,660,384 $ 87,500 0 265,000 153,500 $ 506,000 Total assets Liabilities Common stock-Holland Common stock-Zeeland Retained earnings 12/31 Total liabilities and owners equity $ (330,502) (320,000) 0 (1,009,882) $(1,660,384) $ (7,300) 0 (100,000) (398,700) $ (506,000) 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, 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 Reqc 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.) Show less A Amount a1. Goodwill Controlling Interest NCI a2. Goodwill allocation Amount b. Initial Value Change in Zeeland's RE Excess amortization Investment in Zeeland 0 HOLLAND CORPORATION AND ZEELAND CORPORATION Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Noncontrolling Consolidated Accounts Holland Zeeland Debit Credit Interest Totals Sales $ (710,700) 360,400 89,000 14,600 54,400 (46,782) $ (239,082) $ (434,500) 203,000 33,400 20,400 61,700 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 0 $ (116,000) Dividends declared $ (820,800) $ (312,700) (239,082) (116,000) 50,000 30,000 $ (1,009,882) $ (398,700) $ 125,600 $ 87,500 Retained earnings 12/31 Current assets 541,584 0 Investment in Zeeland, Inc Property and equipment (net) 843,000 150,200 265,000 153,500 Patents Goodwill 0 0 Total assets Liabilities $ 1,660,384 $ (330,502) (320,000) 506,000 (7,300) (100,000) Common stock Noncontrolling interest Retained earnings 12/31 Total liabilities and equities (1,009,882) (398,700) $ (1,660,384) $ (506,000) $ 0 $ 0