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 $ 16,300 250, 300 219,900 $ 486,500 Liabilities Common stock Retained earnings $ 246,500 100,000 140,000 $ 486,500 On January 1, 2020, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by $44,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $307,400. 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 $(512,480) $ (451, 800) Cost of goods sold 260,000 211,500 Depreciation expense 64,000 31,700 Amortization expense 16,300 18,700 Other operating expenses 61,200 56,600 Equity in Zeeland earnings (56, 076) @ Separate company net income 5 (166,976) $ (133,000) Retained earnings 1/1 Net income Dividends declared Retained earnings 12/31 $(822,500) (166,976) 50,000 $ (939,476) $ (358, 600) (133,000) 30,000 $ (461, 660) $ Current assets Investment in Zeeland Property and equipment (net) Patents 127,300 625,512 860,000 153,600 $ 104,500 @ 282,000 179,500 Patents Total assets 153,600 $ 1,766,412 5566,000 $ Liabilities Common stock-Holland Common stock-Zeeland Retained earnings 12/31 Total liabilities and owner's equity 5 (586,936) (320,000 a (939,476) $(1,766,412) (100,000) (46160) 5 (566,000) 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 Complete this question by entering your answers in the tabs below. Reg A and B Reqc Prepare a worksheet to determine the amounts that should appear on Holland's December 31, 2021, consolidated financial statements. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Input all amounts as positive values.) HOLLAND CORPORATION AND ZEELAND CORPORATION Consolidation Worksheet For Year Endine December 2021 Complete this question by entering your answers in the tabs below. Req A and B Reqc ok 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 ht Amount ences at Goodwill Controlling Interest NCI a2 Goodwil allocation Amount b Initial Value Change in Zeeland's RE Excess amization Investment in Zeeland $ 0 KRAR Reqc > Noncontrolling Interest Consolidated Totals Www Consolidation Entries Holland Zeeland Debit Credit S (512,400) S (451,500) 260,000 211 500 64 000 31,700 16,300 18,700 61,200 56,600 (56,076) 0 $(106,976) 5 (133,000) Accounts 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 Retained earnings 1/1 Net income Dividends declared Retained earnings 12/31 Current assets Investment in Zeeland, Inc Property and equipment (net) Patents Goodwil Total assets Liabilities Common stock Noncontrolling interest Retained earnings 12/31 Total liabilities and equities S (822 500) S (358,800) (105,976) (133,000) 50,000 30,000 $ (939,476) S (461,600) $ 127,300 $ 104,500 625,512 0 880.000 262,000 153.600 179,500 0 0 $ 1766.412 566.000 (506,930) (4.400) (320,000) (100,000) (939.476) (461,600) S (1,766 412) $ (568,000) OS 0 Prey 1 of 2 HIE Next >