On January 1, 2020, Holland Corporstion paid $9 per share to a group of Zeeland Corporation shareholders to scquire 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 recent sverage of $7.50 per share both before and after the acquisition by Holland Zeeland's acquisition dste balance sheet follows: Current assets Property and equipment (net) Patents $ 16, see 310,500 222,50 $ 54,500 Liabilities Comon stock Retained earnings $ 249, see 180.00 280, $540,560 On January 1, 2020, Holland assessed the carrying amount of Zeeland's equipment 5-year remaining life to be undervalued by $42.000. Ho and also determined that Zeeland possessed unrecorded patents (10-year remaining life worth $399.900. Zeeland's acquisitionsste fair values for its current assets and abilities were equal to their carrying amounts. Any remaining excess of Zeeland's acquisitionsste 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 $ 489,0) $ (453,500) Cost of goods sold 243,200 212,500 Depreciation expense 31,500 Amortization expense 16,500 18, other operating expenses 62,80 56, Equity in Zeeland earnings (52,025) Separate company net income S (153,326) $ 135,00) Rutained earnings 1/1 Net Incom Dividends declared Retained earnings 12/31 $ 822,700) (153,325) 50,00 $ 226,625) $ (364,220) (135,00) 30.000 $ (469,220) $ 127,500 $ 185,500 Current assets Investment in Zeeland Property and equipment (net) Patents Total assets 852,80 154.00 $ 1,786,952 12,50 $572,00 $548,925) (320) Liabilities Common stock Holland Common stock Zeoland Retained earnings 12/31 Total liabilities and owners equity $ (3.8) a (12) 469,00) $ (572,800) (925,825) $(1,786,952) At year-end, there were no intro-entity receivables or paysbles .. Compute the amount of goodwill recognized in Holland's acquisition of Zee and and the allocation of goodwill to the controlling and noncontrolling interest b. Show how Holland determined to 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. R A and B 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 son.) Show less Amount al Goodwil Controlling interest NCI Goodwl allocation Amount ih Initial Value Change in Zeeland's RE Excess amortization Investment in Zeeland ROASE Reac > Noncontrolling Interest Consolidated Totals HOLLAND CORPORATION AND ZEELAND CORPORATION Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Holland Zeeland Debit Credit $ (489,000) $ (453,500) 248,200 212,500 61,000 31,500 16,500 18,500 62,000 56,000 (52,026) 0 $ (153,326) $ (135,000) 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 Goodwill Total assets Liabilities Common stock Noncontrolling interest Retained earnings 12/31 Total liabilities and equities $ (822,700) $ (364,000) (153,326) (135,000) 50,000 30,000 $ (926,026) $ (469,000) $ 127,500 $ 106,500 643,452 0 862,000 284,000 154,000 181,500 0 0 $ 1,786,952 $ 572,000 (540,926) (3,000) (320,000) (100,000) (926,026) (469,000) $ (1,786,952) $ (572,000)
