Please help me figure out what is incorrect. On January 1, 2020, Holland Corporation paid $7 per share to a group of Zeeland Corporation shareholders
Please help me figure out what is incorrect.
On January 1, 2020, Holland Corporation paid $7 per share to a group of Zeeland Corporation shareholders to acquire 60,000 shares of Zeelands 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 $6.00 per share both before and after the acquisition by Holland. Zeelands acquisition date balance sheet follows:
On January 1, 2020, Holland assessed the carrying amount of Zeelands equipment (5-year remaining life) to be undervalued by $67,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $283,900. Zeelands acquisition-date fair values for its current assets and liabilities were equal to their carrying amounts. Any remaining excess of Zeelands acquisition-date fair value over its book value was attributed to goodwill.
The companies financial statements for the year ending December 31, 2021, follow:
At year-end, there were no intra-entity receivables or payables.
Current assets Property and equipment (net) Patents $230,000 100,000 $ 15,200 Liabilities 249,200 Common stock Retained 205,600 earnings $470,000 140,000 $ 470,000 Sales Cost of goods sold Depreciation expense Amortization expense Other operating expenses Equity in Zeeland earnings Separate company net income Holland Zeeland (780, 900) $(440,500) 395,800 206,000 98,000 32,800 15, 200 19,800 56,800 59,900 (48,126) $ (263, 226) $1122,000) Retained earnings 1/1 Net income Dividends declared Retained earnings 12/31 (821,400) $1328,900) (263, 226) (122,000) 50,000 30,000 $(1,034,626) $420,900) Current assets Investment in Zeeland Property and equipment (net) Patents Total assets $ 126,200 $ 93,500 538,392 0 949,000 271,000 151,400 159,500 $ 1,664,992 $ 524,000 Liabilities Common stock-Holland Common stock-Zeeland Retained earnings 12/31 Total liabilities and owners equity $ (310,366) $ (3,100) (320,000) 0 0 (100,000) (1,034,626) (420,900) $(1,664,992) $(524,000) % Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. . Req A and B Reqc 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 a 1. Goodwill $ 69,100 Controlling Interest NCI a2. Goodwill allocation 3,640X S 65,460X Amount b. S Initial Value 420,000 Change in Zeeland's RE 168,540 Excess amortization (50,148) Investment in Zeeland S 538,392 Reg A and B Regc> Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. ******* Req A and B Reqc Prepare a worksheet to determine the amounts that should appear on Holland's December 31, 2021, consolidated financial statements. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Input all amounts as positive values.) Show less HOLLAND CORPORATION AND ZEELAND CORPORATION Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Noncontrolling Consolidated Entries Accounts Holland Zeeland Debit Credit Interest Totals $ Sales $ (780,900) (440,500) S (1,221,400 Cost of goods sold 395,800 206,000 601,800 Depreciation expense 98,000 32.800 13,400 144,200 Amortization expense 15,200 19,800 28,390 63,390 Other operating 56,800 59,900 116,700 expenses Equity in Zeeland (48,126) 0 earnings 48,128 Separate company net $ $ (263,226) income (122,000) Consolidated net S (295,310) income Noncontrolling interest (32,084 32,0840 in CNI Controlling interest net S (263,226 X income $ Retained earnings 1/1 $ (821,400) 328,900 S (821,400) (328,900) Net income (263,226) (122,000) (263,226 Dividends declared 50,000 30,000 18,000 12,000 50,000 Retained earnings $ $ 12/31 (1,034,626) (420,900) S (1,034,626 Current assets $ 126,200 $ 93,500 S 219,700 Investment in Zeeland, 538,392 0 18,000 556,392 Inc Property and 849,000 equipment (net) 271,000 1,160,2007 53,600 13,400 Patents 151,400 159,500 255,51028,390 607,120X Goodwill 0 0 69,100 69,100 Total assets $ 1,664,992 $ 524,000 S 1,987,020 Liabilities (310,366) (3,100) (313,466) Common stock (320,000) (100,000) 100,000 (320,000 Noncontrolling interest 298,844 298,844 Retained earnings 12/31 (1,034,626) (420,900) (1,034,626) Total liabilities and $ $ equities (1,664,992) (524,000) 915,026 915,026 s (1,987,020
