Prepare a worksheet to determine the amounts that should appear on Hollands December 31, 2021, consolidated financial statements.
On January 1, 2020, Holland Corporation paid $7 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 $5.00 per share both before and after the acquisition by Holland. Zeeland's acquisition date balance sheet follows: Current assets Property and equipment (net) Patents $ 16,200 210,200 218,600 $ 445,000 Liabilities Common stock Retained earnings $ 245,000 100,000 100,000 $ 445,000 On January 1, 2020, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by $45,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $244,800. 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 (524,100) 265,900 65,500 16,200 60,800 (59,112) (174,812) Zeeland $ (450,500) 211,000 31,800 18,800 56,900 0 $ (132,000) $ $ Retained earnings 1/1 Net income Dividends declared Retained earnings 12/31 (822,400) (174,812) 50,000 (947,212) $ (355,900) (132,000) 30,000 $ (457,900) $ Current assets Investment in Zeeland Property and equipment (net) Patents $ 127,200 594,564 859,000 153,400 $ 1,734,164 $ 103,500 0 281,000 178,500 $ 563,000 Total assets Liabilities Common stock-Holland Common stock-Zeeland Retained earnings 12/31 Total liabilities and owners equity $ (466,952) (320,000) 0 (947,212) $(1,734,164) $ (5,100) 0 (100,000) (457,900) $ (563,000) At year-end, there were no intra-entity receivables or payables. Noncontrolling Interest Accounts Consolidated Totals $ 974,600 Sales HOLLAND CORPORATION AND ZEELAND CORPORATION Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Holland Zeeland Debit Credit $ (524,100) $ (450,500) 265,900 211,000 65,500 31,800 9,000 16,200 18,800 24,480 60,800 56,900 (59,112) 0 59,112 $ (174,812) $ (132,000) 476,900 106,300 59,480 117,700 0 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 $ (822,400) $ (355,900) (174,812) (132,000) 50,000 30,000 $ (947,212) $ (457,900) $ 127,200 $ 103,500 594,564 0 859,000 281,000 153,400 178,500 0 Investment in Zeeland, Inc Property and equipment (net) Patents Goodwill 0 0 Total assets Liabilities $ 1,734,164 $ (466,952) (320,000) 563,000 (5,100) (100,000) Common stock Noncontrolling interest Retained earnings 12/31 Total liabilities and equities (947,212) $ (1,734,164) $ (457,900) (563,000) $ 92,592 $
