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 Property and equipment (net) Patents $ 15,600 329,600 210.800 $ 556,000 Liabilities Common stock Retained earnings $ 236,000 100,000 220,000 $ 556,000 On January 1, 2020, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by $51,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $419,900. 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. $ Sales Cost of goods sold Depreciation expense Amortization expense Other operating expenses Equity in Zeeland earnings Separate company net income Holland (594,300) 301,300 74,500 15,600 58,400 (44,286) (188,786) Zeeland $ (444,500) 208,000 32,400 19,400 58,700 0 $ (126,000) $ $ Retained earnings 1/1 Net income Dividends declared Retained earnings 12/31 (821, 800) (188,786) 50,000 (960,586) $ (339, 700) (126,000) 30,000 $ (435,700) $ $ Current assets Investment in Zeeland Property and equipment (net) Patents Total assets $ 126,600 606,792 853,000 152,200 $ 1,738,592 $ 97,500 0 275,000 167,500 $ 540,000 Liabilities Common stock-Holland Common stock-Zeeland Retained earnings 12/31 Total liabilities and owners equity $ (458,006) (320,000) 0 (960,586) $(1,738,592) $ (4,300) 0 (100,000) (435,700) $ (540,000) Noncontrolling Interest Accounts HOLLAND CORPORATION AND ZEELAND CORPORATION Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Holland Zeeland Debit Credit $ (594,300) S (444,500) 301,300 208,000 74,500 32,400 10,200 15,600 19,400 41,990 58,400 58,700 (44,286) 0 44,286 $ (188,786) $ (126,000) Consolidated Totals $ (1,038,800) 509,300 117,100 76.990 117,100 0 Sales Cost of goods sold Depreciation expense Amortization expense Other operating expenses Equity in Zeeland earnings Separate company net income Consolidated net income Noncontroling interest in CNI Controlling interest net income Retained earnings 1/1 Net incomo Dividends declared IS (29,524) $ 339,700 (218,310) 29,524 (188,786) (821,800) (188,786) 50,000 $ (821,800) (188.786) 50,000 $ $ (339,700) (126,000) 30,000 18,000 12,000 18,000 12,000 30,000 S (435,700) IS 97,500 0 Dividends declared Retained earnings 12/31 Current assets Investment in Zeeland, Inc Property and equipment (net) Patents Goodwill Total assets Liabilities Common stock Noncontrolling interest Retained earnings 12/31 50,000 $ (960,586) $ 126,600 606,792 853,000 152,200 0 $ 1,738,592 (458,006) (320,000) 18,000 40,800 377,910 69,100 263,820 10,200 41,990 275,000 167,500 0 $ 540,000 (4,300) (100,000) 50,000 S (960,586) $ 224,100 0 1,158,600 655,620 69,100 $ 2,107 420 (462,306) (320,000) (960,586) (364,528) S (2,107.420) 100,000 175,880 (347,004) (960,586) IS |(1,738,592) (435,700) S (540,000) Total liabilities and equities $ 509,890 1.041.986