On January 1, 2020, Holland Corporation pald $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 $ 14,200 328,200 192,600 $ 535,000 Liabilities Common stock Retained earnings $ 215,880 188,888 220,000 $ 535,000 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 Depreciation expense Amortization expense other operating expenses Equity in Zeeland earnings Separate company net income Holland $ (663,980) 336,880 83,000 14,200 52,800 (42,636) $ (219,736) Zeeland $ (430,500) 201,000 33,800 20,888 62,988 $ (112,000) $ Retained earnings 1/1 Net income Dividends declared Retained earnings 12/31 (820,400) (219,736) 50,000 (990,136) $ (301,900) (112,880) 30,000 $ (383,980) $ $ 83,500 Current assets Investment in Zeeland Property and equipment (net) Patents Total assets $ 125,200 589,212 839,000 149,400 $ 1,702,812 261,880 149,500 $ 494,000 $ (392,676) (320,880) $ (10,100) Liabilities Common stock-Holland Common stock-Zeeland Retained earnings 12/31 Total liabilities and owners equity (990,136) $(1,702,812) (100,000) (383,980) $ (494,800) Req A and B Regc 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 Change in Zeeland's RE Excess amortization Investment in Zeeland S 0 Accounts HOLLAND CORPORATION AND ZEELAND CORPORATION Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Noncontrolling Holland Zeeland Debit Credit Interest $ (663,900) S (430,500) 336,800 201,000 83,000 33,800 14,200 20.800 52,800 62.900 (42,636) 0 42.636 S (219,736) S (112,000) Consolidated Totals S 1,094,400 537,800 0 XX 0 115,700 0 Sales Cost of goods sold Depreciation expense Amortization expense Other operating expenses Equity in Zeeland eamings 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 331,736 80,000 S (301,900) (112,000) 30,000 S (383,900) S 83,500 0 S 208,700 0 S (820,400) (219,736) 50,000 S (990,136) $ 125,200 589,212 839,000 149,400 0 $ 1,702.812 (392,676) (320,000) 261,000 149,500 1,100,000 298,900 0 Goodwill 0 $ 494,000 (10,100) (100,000) Total assets Liabilities Common stock Noncontrolling interest Retained earnings 12/31 Total liabilities and equities 402,776 420,000 0 1,374,036 (990,136) S (383,900) $ (494,000) S $ 42,636 (1,702,812) 0 On January 1, 2020, Holland Corporation pald $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 $ 14,200 328,200 192,600 $ 535,000 Liabilities Common stock Retained earnings $ 215,880 188,888 220,000 $ 535,000 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 Depreciation expense Amortization expense other operating expenses Equity in Zeeland earnings Separate company net income Holland $ (663,980) 336,880 83,000 14,200 52,800 (42,636) $ (219,736) Zeeland $ (430,500) 201,000 33,800 20,888 62,988 $ (112,000) $ Retained earnings 1/1 Net income Dividends declared Retained earnings 12/31 (820,400) (219,736) 50,000 (990,136) $ (301,900) (112,880) 30,000 $ (383,980) $ $ 83,500 Current assets Investment in Zeeland Property and equipment (net) Patents Total assets $ 125,200 589,212 839,000 149,400 $ 1,702,812 261,880 149,500 $ 494,000 $ (392,676) (320,880) $ (10,100) Liabilities Common stock-Holland Common stock-Zeeland Retained earnings 12/31 Total liabilities and owners equity (990,136) $(1,702,812) (100,000) (383,980) $ (494,800) Req A and B Regc 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 Change in Zeeland's RE Excess amortization Investment in Zeeland S 0 Accounts HOLLAND CORPORATION AND ZEELAND CORPORATION Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Noncontrolling Holland Zeeland Debit Credit Interest $ (663,900) S (430,500) 336,800 201,000 83,000 33,800 14,200 20.800 52,800 62.900 (42,636) 0 42.636 S (219,736) S (112,000) Consolidated Totals S 1,094,400 537,800 0 XX 0 115,700 0 Sales Cost of goods sold Depreciation expense Amortization expense Other operating expenses Equity in Zeeland eamings 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 331,736 80,000 S (301,900) (112,000) 30,000 S (383,900) S 83,500 0 S 208,700 0 S (820,400) (219,736) 50,000 S (990,136) $ 125,200 589,212 839,000 149,400 0 $ 1,702.812 (392,676) (320,000) 261,000 149,500 1,100,000 298,900 0 Goodwill 0 $ 494,000 (10,100) (100,000) Total assets Liabilities Common stock Noncontrolling interest Retained earnings 12/31 Total liabilities and equities 402,776 420,000 0 1,374,036 (990,136) S (383,900) $ (494,000) S $ 42,636 (1,702,812) 0