The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.10 per share on January 1, 2017. The remaining 20 percent of Devines shares also traded actively at $6.10 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 $67,500 and a fully amortized trademark with an estimated 10-year remaining life had a $61,000 fair value. At the acquisition date, Devine reported common stock of $100,000 and a retained earnings balance of $149,500.

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

	Holtz Corporation				Devine, Inc.
Sales	$	(708,000	)		$	(350,250	)
Cost of goods sold		237,000				116,000
Operating expenses		311,000				74,250
Dividend income		(16,000	)			0
Net income	$	(176,000	)		$	(160,000	)
Retained earnings, 1/1/18	$	(736,000	)		$	(219,500	)
Net income (above)		(176,000	)			(160,000	)
Dividends declared		90,000				20,000
Retained earnings, 12/31/18	$	(822,000	)		$	(359,500	)
Current assets	$	139,000			$	175,500
Investment in Devine, Inc		488,000				0
Buildings and equipment (net)		892,000				350,000
Trademarks		180,000				210,000
Total assets	$	1,699,000			$	735,500
Liabilities	$	(557,000	)		$	(276,000	)
Common stock		(320,000	)			(100,000	)
Retained earnings, 12/31/18 (above)		(822,000	)			(359,500	)
Total liabilities and equities	$	(1,699,000	)		$	(735,500	)

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.

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

1. If instead the noncontrolling interest shares of Devine had traded for $3.78 surrounding Holtzs acquisition date, what is the impact on goodwill?

Consolidation Entries Holtz Devine Inc. Noncontrolling Interest Consolidated Totals Accounts Corporation Debit Credit $ (1,058,250) $ (708,000) Sales (350,250) 116,000 Cost of goods sold 237,000 353,000 Operating expenses 311,000 74,250 19,600 404,850 Dividend income (16,000) 0 16,000 0 $ (176,000) Separate company net income (160,000) Consolidated net income (300,400) NI attributable to noncontrolling interest 0 NI attributable to Holtz Corp. (300,400) $ (736,000) Retained earnings, 1/1 219,500 40,320 (776,320) |(219,500) (160,000) Net income (176,000) (280,800) Dividends declared 20,000 16,000 90,000 90,000 4,000 S (822,000) S (967,120) Retained earnings, 12/31 (359,500) $ 175,500 Current assets S 139,000 314,500 367,600 Investment in Devine 488,000 0 40,320 0 1,282,500 Buildings and equipment (net) 892,000 350,000 54,000 210,000 54,900 Trademarks 180,000 438,800 Goodwill 350,600 350,600 $ 1,699,000 $735,500 2,386,400 Total assets $ (557,000) Liabilities S (833,000) (276,000) (320,000) Common stock (100,000) 100,000 (320,000) Retained earnings, 12/31 (822,000) (359,500) (967,120) NCI in Devine, 1/1 91,900 NCI in Devine, 12/31 4,000 (175,680) S S ( 1,699,000) S (2,295,800) $ 854,920 $ 515,820 Total liabilities and equities (735,500) Required A Required B > Required A Required B Required C 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 Operating expenses Cost of goods sold Total expenses Consolidated net income To noncontrolling interest 0 To Holtz Corporation Required A Required C Complete this question by entering your answers in the tabs below. Required A Required B Required C surrounding Holtz's acquisition date, what If instead the noncontrolling interest shares of Devine had traded for $3.7 impact on gwill? t Goodwill decreases to