The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.45 per share on January 1, 2017. The remaining 20 percent of Devines shares also traded actively at $6.45 per share before and after Holtzs acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devines underlying accounts except that a building with a 5-year future life was undervalued by $65,500 and a fully amortized trademark with an estimated 10-year remaining life had a $85,000 fair value. At the acquisition date, Devine reported common stock of $100,000 and a retained earnings balance of $224,500.

Following are the separate financial statements for the year ending December 31, 2018:

At year-end, there were no intra-entity receivables or payables.

1. Prepare a worksheet to consolidate these two companies as of December 31, 2018.

2. Prepare a 2018 consolidated income statement for Holtz and Devine.

3. If instead the noncontrolling interest shares of Devine had traded for $4.75 surrounding Holtzs acquisition date, what is the impact on goodwill?

4. 

5. 

Holtz Devine, Corporation (747,000) Inc. (432,750) Sales Cost of goods sold Operating expenses Dividend income 207,000 338,000 (16,000) 135,000 126,750 $(171,000) (218,000) Net income (294,500) (171,000) 20,000 Retained earnings, 1/1/18 Net income (above) Dividends declared (725,000) (218,000) 50,000 (893,000) (445,500) Retained earnings, 12/31/18 Current assets 167,000 184,500 Investment in Devine, Inc Buildings and equipment (net) 516,000 880,000 145,000 363,000 214,000 Trademarks $ 761,500 1,708,000 Total assets Liabilities (495,000) (320, 000) (893,000) (216,000) (100,000) (445,500 Common stock Retained earnings, 12/31/18 (above) Total liabilities and equities (1,708,000) (761,500) HOLTZ CORPORATION AND DEVINE, INC. Consolidation Worksheet For Year Ending December 31, 2018 Consolidation Entries Noncontrolling Consolidated Interest Holtz Accounts Corporation Devine Inc. Totals Credit Debit 9 $(747,000) Sales (432,750) Cost of goods sold Operating expenses Dividend income 207,000 135,000 338,000 126,750 (16,000) $ (218,000) Separate company net income (171,000) Consolidated net income S 0 NI attributable to noncontrolling interest NI attributable to Holtz Corp 0 Retained earnings, 1/1 (725,000) (294,500) (171,000) Net income (218,000) 20,000 Dividends declared 50,000 $ (893,000) Retained earnings, 12/31 0 (445,500) 167,000 184,500 Current assets Investment in Devine 516,000 0 Buildings and equipment (net) Trademarks Goodwill 880,000 363,000 145,000 214,000 $761,500 Total assets 1,708,000 0 Liabilities (495,000) (216,000) (100,000) Common stock (320,000) Retained earnings, 12/31 NCI in Devine, 1/1 (445,500) (893,000) NCI in Devine, 12/31 0 S Total liabilities and equities 0 0 0 (761,500) (1,708,000) Prepare a 2018 consolidated income statement for Holtz and Devine. (Enter all anmounts as positive values. HOLTZ CORPORATION AND DEVINE, INC. Consolidated Income Statement For Year Ending December 31, 2018 Total expenses To noncontrolling interest To Holtz Corporation If instead the noncontrolling interest shares of Devine had traded for $4.75 surrounding Holtz's acquisition date, what is the impact on goodwill? Goodwill to Holtz Devine, Corporation (747,000) Inc. (432,750) Sales Cost of goods sold Operating expenses Dividend income 207,000 338,000 (16,000) 135,000 126,750 $(171,000) (218,000) Net income (294,500) (171,000) 20,000 Retained earnings, 1/1/18 Net income (above) Dividends declared (725,000) (218,000) 50,000 (893,000) (445,500) Retained earnings, 12/31/18 Current assets 167,000 184,500 Investment in Devine, Inc Buildings and equipment (net) 516,000 880,000 145,000 363,000 214,000 Trademarks $ 761,500 1,708,000 Total assets Liabilities (495,000) (320, 000) (893,000) (216,000) (100,000) (445,500 Common stock Retained earnings, 12/31/18 (above) Total liabilities and equities (1,708,000) (761,500) HOLTZ CORPORATION AND DEVINE, INC. Consolidation Worksheet For Year Ending December 31, 2018 Consolidation Entries Noncontrolling Consolidated Interest Holtz Accounts Corporation Devine Inc. Totals Credit Debit 9 $(747,000) Sales (432,750) Cost of goods sold Operating expenses Dividend income 207,000 135,000 338,000 126,750 (16,000) $ (218,000) Separate company net income (171,000) Consolidated net income S 0 NI attributable to noncontrolling interest NI attributable to Holtz Corp 0 Retained earnings, 1/1 (725,000) (294,500) (171,000) Net income (218,000) 20,000 Dividends declared 50,000 $ (893,000) Retained earnings, 12/31 0 (445,500) 167,000 184,500 Current assets Investment in Devine 516,000 0 Buildings and equipment (net) Trademarks Goodwill 880,000 363,000 145,000 214,000 $761,500 Total assets 1,708,000 0 Liabilities (495,000) (216,000) (100,000) Common stock (320,000) Retained earnings, 12/31 NCI in Devine, 1/1 (445,500) (893,000) NCI in Devine, 12/31 0 S Total liabilities and equities 0 0 0 (761,500) (1,708,000) Prepare a 2018 consolidated income statement for Holtz and Devine. (Enter all anmounts as positive values. HOLTZ CORPORATION AND DEVINE, INC. Consolidated Income Statement For Year Ending December 31, 2018 Total expenses To noncontrolling interest To Holtz Corporation If instead the noncontrolling interest shares of Devine had traded for $4.75 surrounding Holtz's acquisition date, what is the impact on goodwill? Goodwill to