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 $6.50 per share both before and after the acquisition by Holland. Zeeland's acquisition date balance sheet follows: Current assets Property and equipment (net) Patents $ 14,800 268,800 200,400 $ 484,000 Liabilities Common stock Retained earnings $ 224,000 100,000 160,000 $ 484,000 On Janu 1, 2020, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by $63,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $315,600. 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: $ Sales Cost of goods sold Depreciation expense Amortization expense Other operating expenses Equity in Zeeland earnings Holland (734,100) 372,200 92,000 14,800 55,200 (44,304) Zeeland $ (436,500) 204,000 33,200 20,200 61,100 0 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. Complete this question by entering your answers in the tabs below. 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 Amount a1. Goodwill Controlling Interest NCI a2. Goodwill allocation Amount b. Initial Value Amount a1. Goodwill Controlling Interest NCI a2. Goodwill allocation Amount b. Initial Value Change in Zeeland's RE Excess amortization Investment in Zeeland Prepare a worksheet to determine the amounts that should appear on Holland's December 31, 2021, consolidated financial statement accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the de of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. I amounts as positive values.) S HOLLAND CORPORATION AND ZEELAND CORPORATION Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Consolidated Noncontrolling Interest Accounts Holland Zeeland Debit Credit 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 $ (734,100) $ (436,500) 372,200 204,000 92,000 33,200 14,800 20,200 55,200 61,100 (44,304) 0 $ (244,204) $ (118,000) Controlling interest net income Retained earnings 1/1 Net income Dividends declared Retained earnings 12/31 Current assets $ (821,000) $ (318,100) (244,204) (118,000) 50,000 30,000 $ (1,015,204) (406,100)| $ 125,800 $ 89,500 574,668 0 845,000 267,000 150,600 155,500 Investment in Zeeland, Inc Property and equipment (net) Patents Goodwill 0 0 Total assets $ 1,696,068 512,000 Liabilities (360,864) (320,000) (5,900) (100,000) Common stock Noncontrolling interest Retained earnings 12/31 Total liabilities and equities (1,015,204) (406,100) $ (1,696,068) $ (512,000) $ 0 $ 0
