On January 1, 2020, Holland Corporation paid $9 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 $8.00 per share both before and after the acquisition by Holland. Zeeland's acquisition date balance sheet follows: Current assets $14,200 Property and equipment (net) Patents 328,200 192,600 Liabilities Common stock Retained earnings $215,000 100,000 220,000 $535,000 $535,000 ces On January 1, 2020, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by $57,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $295,400. 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 Sales Cost of goods sold i 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 Current assets: Investment in Zeeland Property and equipment (net) Patents Holland $ (663,900) Zeeland $(430,500) 336,800 201,000 83,000 $3,800 14,200 20,800 52,800 62,900 (42,636) $ (219,736) $(112,000) $ (820,400) (219,736) 50,000 $ (990,136) $ 125,200 589,212 839,000 149,400 $(301,900) (112,000) 30,000 $ (383,900) $ 83,500 261,000 149,500 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 Retained earnings 1/1 Net income Dividends declared Retained earnings 12/31 Current assets Investment in Zeeland Property and equipment (net) Patents Total assets Liabilities Holland Zeeland (663,900) $(430,500) 336,800 201,000 83,000 33,800 14,200 20,800 52,800 (42,636) 62,900 $ (219,736) $(112,000) $ (820,400) $(301,900) (219,736) 50,000 (112,000) $ (990,136) 30,000 $(383,900) $ 125,200 $ 83,500 589,212 839,000 261,000 149,400 149,500 $1,702,812 $494,000 $ (392,676) $ (10,100) Common stock-Holland (320,000) Common stock-Zeeland Retained earnings 12/31 Total Liabilities and owners equity (100,000) (383,900) (990,136) $(1,702,812) $(494,000) 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. Req A and B Req C 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.) 1. Goodwill 2. Goodwill allocation b. Initial Value Change in Zeeland's RE Excess amortization Investment in Zeeland Amount Controlling Interest NCI $ Amount < Aand Reg C > Show less For rear ending vecember 31, 2021 Accounts Holland Zeeland Consolidation Entries Debit Credit Noncontrolling Interest Consolidated 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 $ (219,736) $ (112,000) $ (820,400) $ (301,900) $ (663,900) $ (430,500) 336,800 201,000 83,000 33,800 14,200 20,800 52.800 62,900 (42,636) 0 Retained earnings 1/1 Net income (219,736) Dividends declared 50,000 (112,000) 30,000 Retained earnings 12/31 $ (990,136) $ (383,900) Current assets $ 125,200 $ 83,500 Investment in Zeeland, Inc 589,212 0 Property and equipment (net) 839,000 261,000 Patents 149,400 149,500 Goodwill 0 Total assets $ 1,702,812 $ 494,000 Liabilities Common stock Noncontrolling interest Retained eamings 12/31 Total liabilities and equities (990,136) (383,900) $ (1,702,812) $ (494,000) $ 0 $ (392,676) (10,100) (320,000) (100,000) Pray 6 of 6 Next