The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.70 per share on January 1, 2020. The remaining 20 percent of Devine's shares also traded actively at $6.70 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 $57,000 and a fully amortized trademark with an estimated 10-year remaining life had a $69,000 fair value. At the acquisition date, Devine reported common stock of $100,000 and a retained earnings balance of $224,000. Following are the separate financial statements for the year ending December 31, 2021: 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 $ (800,000) 285,000 299,000 (16,000) $ (232,000) $ (777,000) (232,000) 90,000 $ (919,000) $ 238,500 536,000 870,000 137,000 $ 1,781,500 $ (542,500) (320,000) (919,000) $(1,781,500) Devine, Inc. $ (379,500) 146,000 130,500 0 $ (103,000) $ (294,000) (103,000) 20,000 $ (377,000) $ 177,000 0 357,000 188,000 $ 722,000 $ (245,000) (100,000) (377,000) $ (722,000) 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 $4.50 surrounding Holtz's acquisition date, what is the impact on goodwill? Accounts Holtz Corporation Consolidation Entries Debit Credit Noncontrolling Interest $ (800,000) 285,000 299,000 (16,000) $ (232,000) Devine Inc. $ (379,500) 146,000 130,500 0 $ (103,000) Consolidated Totals $ (1,179,500) 431,000 447,800 Sales Cost of goods sold Operating expenses Dividend income Separate company net income Consolidated net income NI attributable to noncontrolling interest NI attributable to Holtz Corp. 18,300 16,000 0 0 294,000 Retained earnings, 1/1/21 Net income Dividends declared Retained earnings, 12/31/21 $ (777,000) (232,000) 90,000 (294,000) (103,000) 20,000 $ (377,000) 16,000 4,000 90,000 $ (919,000) $ 177,000 $ 415,500 0 Current assets Investment in Devine, Inc. Buildings and equipment (net) Trademarks Goodwill Total assets $ 238,500 536,000 870,000 137,000 0 $ 1,781,500 357,000 188,000 0 $ 722,000 Liabilities $ (542,500) $ (245,000) 1000000 1400000 $ (542,500) (320,000) (919,000) (245,000) (100,000) (377,000) Liabilities Common stock Retained earnings, 12/31/21 (above) NCI in Devine, 1/1 NCI in Devine, 12/31 Total liabilities and equities (4,000) $ (1,781,500) $ 328,300 (722,000) $ 16,000 Required A Required B > HOLTZ CORPORATION AND DEVINE, INC. Consolidated Income Statement For Year Ending December 31, 2021 Sales $ 1,179,500 Cost of goods sold Operating expenses 447,800 Total expenses 447,800 Consolidated net income $ 731,700 To noncontrolling interest To Holtz Corporation $ 731,700 The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.70 per share on January 1, 2020. The remaining 20 percent of Devine's shares also traded actively at $6.70 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 $57,000 and a fully amortized trademark with an estimated 10-year remaining life had a $69,000 fair value. At the acquisition date, Devine reported common stock of $100,000 and a retained earnings balance of $224,000. Following are the separate financial statements for the year ending December 31, 2021: 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 $ (800,000) 285,000 299,000 (16,000) $ (232,000) $ (777,000) (232,000) 90,000 $ (919,000) $ 238,500 536,000 870,000 137,000 $ 1,781,500 $ (542,500) (320,000) (919,000) $(1,781,500) Devine, Inc. $ (379,500) 146,000 130,500 0 $ (103,000) $ (294,000) (103,000) 20,000 $ (377,000) $ 177,000 0 357,000 188,000 $ 722,000 $ (245,000) (100,000) (377,000) $ (722,000) 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 $4.50 surrounding Holtz's acquisition date, what is the impact on goodwill? Accounts Holtz Corporation Consolidation Entries Debit Credit Noncontrolling Interest $ (800,000) 285,000 299,000 (16,000) $ (232,000) Devine Inc. $ (379,500) 146,000 130,500 0 $ (103,000) Consolidated Totals $ (1,179,500) 431,000 447,800 Sales Cost of goods sold Operating expenses Dividend income Separate company net income Consolidated net income NI attributable to noncontrolling interest NI attributable to Holtz Corp. 18,300 16,000 0 0 294,000 Retained earnings, 1/1/21 Net income Dividends declared Retained earnings, 12/31/21 $ (777,000) (232,000) 90,000 (294,000) (103,000) 20,000 $ (377,000) 16,000 4,000 90,000 $ (919,000) $ 177,000 $ 415,500 0 Current assets Investment in Devine, Inc. Buildings and equipment (net) Trademarks Goodwill Total assets $ 238,500 536,000 870,000 137,000 0 $ 1,781,500 357,000 188,000 0 $ 722,000 Liabilities $ (542,500) $ (245,000) 1000000 1400000 $ (542,500) (320,000) (919,000) (245,000) (100,000) (377,000) Liabilities Common stock Retained earnings, 12/31/21 (above) NCI in Devine, 1/1 NCI in Devine, 12/31 Total liabilities and equities (4,000) $ (1,781,500) $ 328,300 (722,000) $ 16,000 Required A Required B > HOLTZ CORPORATION AND DEVINE, INC. Consolidated Income Statement For Year Ending December 31, 2021 Sales $ 1,179,500 Cost of goods sold Operating expenses 447,800 Total expenses 447,800 Consolidated net income $ 731,700 To noncontrolling interest To Holtz Corporation $ 731,700