The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.60 per share on January 1, 2017. The remaining 20 percent of Devine's shares also traded actively at $6.60 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 $68,000 and a fully amortized trademark with an estimated 10-year remaining life had a $79,000 fair value. At the acquisition date, Devine reported common stock of $100,000 and a retained earnings balance of $210,000 Following are the separate financial statements for the year ending December 31, 2018 Holtz Devine Inc Sales Cost of goods sold Operating expenses Dividend income Corporation $ 730,000 238,000 313,000 (16,000 (481,250) 161,000 134,250 Net income Retained earnings, 1/1/18 Net income (above) Dividends declared $ (195,000) (186,000) $ (770,000) (280,000) (195,000) (186,000) 20,000 (446,000) Retained earnings, 12/31/18 Current assets Investment in Devine, Inc Buildings and equipment (net) Trademarks 60,000 $ (905,000 $164,500 528,000 915,000 175,000 $ 1,782,500 $ 160,000 484,000 191,000 Total assets $ 835,000 Liabilities $ (557,500) (289,000) (100,000) (905,000) (446,000) n stoclk (320,000) Retained earnings, 12/31/18 (above) Total liabilities and equities $ (1,782,500) (835,000) At year-end, there were no intra-entity receivables or payables Required Required Required Prepare a worksheet to consolidate these two companies as of December 31, 2018. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Amounts in the Debit and Credit columns should be entered as positive. Negative amounts for the Noncontrolling Interest and Consolidated Totals columns should be entered with a minus sign.) Show less HOLTZ CORPORATION AND DEVINE, INC. Consolidation Worksheet For Year Ending December 31, 2018 Consolidation Entries Debit Credit Devine Holtz Corporation Inc. Noncontrolling Consolidated Accounts Interest Totals Sales 730,000) (481,250) Cost of goods sold Operating expenses Dividend income 238,000 161,000 313,000 134,250 (16,000) Separate company net(195,000) (186,000 income Consolidated net income NI attributable to noncontrolling interest NI attributable to Holtz or Retained earnings, 1/1 (770,000) Net income Dividends declared 280,000 (195,000) (186,000) 60,00020,000 Retained earnings,(905,000) 12/31 446,000 s 164,500160,000 Current assets Investment in Devine Buildings and equipment 528,000 0 915,000 484,000 175,000 191,000 net Trademarks Goodwill 0 0 Total assets $1,782,500| 35,000 (557,500) (289,000 Liabilities Common stock Retained earnings, 12/31(905,000) (446,000) NCI in Devine, 1/1 NCl in Devine, 12/31 (320,000) (100,000) Total liabilities and equities 1,782,500) (835,000 Required A Required BRequired 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 Total expenses To noncontrolling interest To Holtz Corporation Required A Required B Required C If instead the noncontrolling interest shares of Devine had traded for $4.57 surrounding Holtz's acquisition date, what is the impact on goodwill? Goodwill to
