On January 1, 2020, Holland Corporation paid $8 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 $6.00 per share both before and after the acquisition by Holland Zeeland's acquisition date balance sheet follows: Current assets Property and equipment (net) Patents 5 14,500 Liabilities 248,500 Connon stock 196,500 Retained earnings 5 459,500 $ 219,500 100,000 140,000 $ 459,500 33 On January 1, 2020, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by $60,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $290,600. 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 Zeeland Sales $ (699,000) $ (433,500) Cost of goods sold 354,500 282,500 Depreciation expense 87.500 33,500 Amortization expense 14,500 20,500 Other operating expenses 54,00 62,000 Equity in Zeeland earnings (44,364) @ Separate company net income $ (232,864) $(115,000) Retained earnings 1/1 Net income Dividends declared Retained earnings 12/31 $ (820,700) (232,864) 50,000 $(1,003,564) $ (310,000) (115,000) 30.000 $ (395, 000) Sales Cost of goods sold Depreciation expense Amortization expense Other operating expenses Equity in Zeeland earnings Separate company net income Retained earnings 1/1 Net income Dividends declared Retained earnings 12/31 Holland $ (699,000) 354,500 87,500 14,500 54,000 (44,364) $ (232,864) Zeeland $(433,500) 282,500 33,500 20,500 62,000 0 $(115,000) $ (820,700) (232,864) 50,000 ${1,003,564) $ (310,000) (115,000) 30,000 $ (395,000) $ 86,500 Current assets Investment in Zeeland Property and equipment (net) Patents Total assets $ 125,500 583,728 842,000 150,000 $ 1,701,228 264,000 152,500 $ 503,000 $ $ (377,664) (320,000) (8,000) Liabilities Common stock-Holland Common stock-Zeeland Retained earnings 12/31 Total liabilities and owners equity (1,003,564) $(1,701,228) (100,000) (395,000) $ (503,000) 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 . Now
