Problem 4-31 (Algo) (LO 4-3, 4-5, 4-7) 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 $ 14,700 208,700 199,100 $422,500 Liabilities Common stock Retained earnings $222,500 100,000 100,000 $422,500 On January 1, 2020, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by $62.000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $226,900. 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: Holland. $ (722,400) 366,300 90,500 14,700 Zeeland $ (435,500) Sales Cost of goods sold. Depreciation expense Amortization expense Other operating expenses Equity in Zeeland earnings Separate company net income 54,800 (49,146) $ (245,246) 203,500 33,300 20,300 61,400 $ (117,000)