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 $7.50 per share both before and after the acquisition by Holland. Zeeland's acquisition date balance sheet follows: Current assets $ 16,500 Property and equipment (net) Patents 310,500 222,500 Liabilities Common stock Retained earnings $ 249,500 100,000 200,000 $ 549,500 $ 549,500 On January 1, 2020, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by $42,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $398,900. 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: Zeeland Sales Holland $ (489,000) $ (453,500) Cost of goods sold 248,200 212,500 Depreciation expense 61,000 31,500 Amortization expense 16,500 18,500 Other operating expenses 62,000 Equity in Zeeland earnings (52,026) 56,000 0 Separate company net income $ (153,326) $ (135,000) Retained earnings 1/1 $ (822,700) $ (364,000) Net income (153,326) Dividends declared Retained earnings 12/31 $ 50,000 (926,026) (135,000) 30,000 $ (469,000) Current assets Investment in Zeeland $ 127,500 $ 106,500 643,452 Property and equipment (net) Patents Total assets Liabilities Common stock-Holland Common stock-Zeeland Retained earnings 12/31 Total liabilities and owners equity 862,000 154,000 $ 1,786,952 $ (540,926) (320,000) 0 (926,026) $ (1,786,952) 0 284,000 181,500 $ 572,000 $ (3,000) 0 (100,000) (469,000) $ (572,000)