Prepare a 2018 consolidated income statement for Holtz and Devine. (Enter all amounts as positive values.)

HOLTZ CORPORATION AND DEVINE, INC.
Consolidated Income Statement
For Year Ending December 31, 2018
Sales
Total expenses		0
		$0
To noncontrolling interest
To Holtz Corporation		$0

If instead the noncontrolling interest shares of Devine had traded for $4.50 surrounding Holtzs acquisition date, what is the impact on goodwill?

Goodwill

to

The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.70 per share on January 1, 2017. The remaining 20 percent of Devine's shares also traded actively at $6.70 per share before and after Holtz's acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devine's underlying accounts except that a building with a 5-year future life was undervalued by $57,000 and a fully amortized trademark with an estimated 10-year remaining life had a $69,000 fair value. At the acquisition date, Devine reported common stock of $100,000 and a retained earnings balance of $224,000. Following are the separate financial statements for the year ending December 31, 2018 Holtz Devine, Corporation S Inc. (379,500) 146,000 Sales Cost of goods sold Operating expenses Dividend income (800,000) 285,000 299,000 (16,000) 130,500 (232,000) Net income (103,000) (777,000 (232,000) 90,000 Retained earnings, 1/1/18 Net income (above) Dividends decla red $(294,000) (103,000) 20,000 (377,000) (919,000) Retained earnings, 12/31/18 Current assets 238,500 177,000 Investment in Devine, Inc Buildings and equipment (net) Trademarks 536,000 870,000 357,000 188,000 137,000 $ 1,781,50e Total assets 722,000 $ (245,000) (100, 000) (377,000) Liabilities (542,500) (320,000) (919,000) Common stock Retained earnings, 12/31/18 (above) (722,000) Total liabilities and equities (1,781,500) At year-end, there were no intra-entity receivables or payables. a. Prepare a worksheet to consolidate these two companies as of December 31, 2018. b. Prepare a 2018 consolidated income statement for Holtz and Devine. c. If instead the noncontrolling interest shares of Devine had traded for $4.50 surrounding Holtz's acquisition date, what is the impact on goodwill? Consolidation Worksheet For Year Ending December 31, 2018 Consolidation Entries Noncontrolling Consolidated Interest Holtz Accounts Corporation Devine Inc. Totals Debit Credit (800,000) Sales (379,500) 146,000 Cost of goods sold 285,000 299,000 130,500 Operating expenses Dividend income (16,000) $ (232,000) Separate company net income (103,000) Consolidated net income NI attributable to noncontrolling interest NI attributable to Holtz Corp. Retained earnings, 1/1 (777,000) (294,000) (232,000)(103,000) Net income Dividends declared 90,000 20,000 (919,000) Retained earnings, 12/31 (377,000) 238,500 177,000 Current assets Investment in Devine 536,000 Buildings and equipment (net) 870,000 357,000 Trademarks 137,000 188,000 Goodwill 0 $ 1,781,500 722,000 Total assets (542,500) Liabilities (245,000) (100,000) Common stock (320,000) (919,000) (377,000) Retained earnings, 12/31 NCI in Devine, 1/1 NCI in Devine, 12/31 Total liabilities and equities $ (722,000) 0 0 (1,781,500)