Problem 4-39 (Algo) (LO 4-5, 4-6, 4-7) The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.80 per share on January 1, 2020. The remaining 20 percent of Devine's shares also traded actively at $6.80 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 $84,000 and a fully amortized trademark with an estimated 10-year remaining life had a $81,000 fair value. At the acquisition date, Devine reported common stock of $100,000 and a retained earnings balance of $254,000. Following are the separate financial statements for the year ending December 31, 2021: Devine, Inc. $ (409, 250) 177,000 128, 250 Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/21 Net income (above) Dividends declared Retained earnings, 12/31/21 Current assets Investment in Devine, Inc. Buildings and equipment (net) Trademarks Total assets Liabilities Common stock Retained earnings, 12/31/21 (above) Total liabilities and equities Holtz Corporation $ (751, 000) 249,000 287,000 (16,000) $ (231,000) $ (753,000) (231,000) 80,000 $ (904,000) $ 147,000 544,000 900,000 147,000 $ 1,738,000 $ (514,000) (320,000) (904,000 $ (1,738,000) $ (104,000) $ (324,000) (104,000) 20,000 $ (408,000) $ 186,000 405,000 145,000 $ 736,000 $ (228,000) (100,000) (408,000) $ (736,000) At year-end, there were no intra-entity receivables or payables. a. Prepare a worksheet to consolidate these two companies as of December 31, 2021. b. Prepare a 2021 consolidated income statement for Holtz and Devine. c. If instead the noncontrolling interest shares of Devine had traded for $5.19 surrounding Holtz's acquisition date, what is the impact on goodwill? Accounts Consolidation Entries Debit Credit Noncontrolling Consolidated Interest Totals Holtz Corporation Devine Inc. $ (751,000) $ (409,250) 249,000 177,000 287,000 128, 250 (16,000) 0 $ (231,000) $ (104,000) $ (1,160,250) 426,000 440,150 24,900 16,000 Sales Cost of goods sold Operating expenses Dividend income Separate company net income Consolidated net income Nl attributable to noncontrolling interest NI attributable to Holtz Corp. 0 $ (15,820) (294,100)| 15,820 (278,280) $ 324,000 36,080 Retained earnings, 1/1/21 Net income Dividends declared Retained earnings, 12/31/21 $ (753,000) $ (324,000) (231,000) (104,000) 80,000 20,000 $ (904,000) $ (408,000) (789,080) (278,280) 80,000 (987,360) 16,000 4,000 $ 333,000 0 Current assets Investment in Devine, Inc. Buildings and equipment (net) Trademarks Goodwill Total assets $ 147,000 $ 186,000 544,000 0 900,000 405,000 147,000 145,000 0 0 $ 1,738,000 $ 736,000 36,080 67,200 72.900 161,000 580,080 16,800 8,100 1,355,400 356,800 161,000 2,206,200 $ $ $ (514,000) $ (228,000) (320,000) (100,000) (904,000) (408,000) 100,000 (742,000) (320,000) (987,360) Liabilities Common stock Retained earnings, 12/31/21 (above) NCI in Devine, 1/1 NCI in Devine, 12/31 Total liabilities and equities (137,020) (156,840) (156,840) $ (2,206,200) $ (1,738,000) $ (736,000) $ 802,080 $ 657,060 Prepare a 2021 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, 2021 Sales $ 1,160,250 Cost of goods sold 426,000 Operating expenses 440,150 Total expenses 866,150 Consolidated net income $ 294,100 To noncontrolling interest $ 58,820 To Holtz Corporation $ 235,280