The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.80 per share on January 1, 2014. The remaining 20 percent of Devines shares also traded actively at $6.80 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 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, 2015:

		Holtz Corporation				Devine, Inc.
Sales		$	(751,000	)		$	(409,250	)
Cost of goods sold			249,000				177,000
Operating expenses			287,000				128,250
Dividend income			(16,000	)			0
Net income		$	(231,000	)		$	(104,000	)
Retained earnings, 1/1/15		$	(753,000	)		$	(324,000	)
Net income (above)			(231,000	)			(104,000	)
Dividends declared			80,000				20,000
Retained earnings, 12/31/15		$	(904,000	)		$	(408,000	)
Current assets		$	147,000			$	186,000
Investment in Devine, Inc			544,000				0
Buildings and equipment (net)			900,000				405,000
Trademarks			147,000				145,000
Total assets		$	1,738,000			$	736,000
Liabilities		$	(514,000	)		$	(228,000	)
Common stock			(320,000	)			(100,000	)
Retained earnings, 12/31/15 (above)			(904,000	)			(408,000	)
Total liabilities and equities		$	(1,738,000	)		$	(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, 2015. (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.)

For Year Ending December 31, 2015 Consolidation Entries Noncontrolling Interest C onsolidated Totals Accounts Debit Credit Holtz Corporation (751,000) 249,000 Devine Inc. (409,250) 177.000 (1,160,250) 426,000 440,150 128,250 Sales Cost of goods sold Operating expenses Dividend income Separate company net income Consolidated net income NCI in consolidated net income Holtz's interest in consolidated net income 287,000 (16,000) (231,000) 24,900 16,000 (104,000) (15,820) (294, 100) 15,820 (278,280) 324,000 36,080 Retained earnings, 1/1 Net income Dividends declared Retained earnings, 12/31 (753,000) (231,000) 80,000 (904,000) (324,000) (104,000) 20,000 (408,000) (789,080) (278,280) 80,000 (987,360) 16,000 4,000 186,000 333,000 o Current assets Investment in Devine Buildings and equipment (net) Trademarks Goodwill Total assets 147,000 544,000 900,000 147,000 405,000 145,000 36,080 67,200 72,900 161,000 580,080 16,800 8,100 1,355,400 356,800 161,000 2,206,200 0 1,738,000 736,000 (514,000) (320,000) (904,000) (228,000) (100,000) (408,000) 100,000 (742,000) (320,000) (987,360) Liabilities Common stock Retained earnings, 12/31 NCI in Devine, 1/1 NCI in Devine, 12/31 Total liabilities and equities 145,020 (145,020) (156,840) (156,840) (2,206,200) (1,738,000) (736,000) 802,080 802,080 b. Prepare a 2015 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, 2015 Sales $ 1,160,250 Cost of goods sold 426,000 Operating expenses 440,150 Total expenses 866,150 Consolidated net income $ 294,100 Noncontrolling interest in CNI $ 58,820 Controlling interest in CNI $ 235,280 *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted. 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? Goodwill decrease to $ 128,800 For Year Ending December 31, 2015 Consolidation Entries Noncontrolling Interest C onsolidated Totals Accounts Debit Credit Holtz Corporation (751,000) 249,000 Devine Inc. (409,250) 177.000 (1,160,250) 426,000 440,150 128,250 Sales Cost of goods sold Operating expenses Dividend income Separate company net income Consolidated net income NCI in consolidated net income Holtz's interest in consolidated net income 287,000 (16,000) (231,000) 24,900 16,000 (104,000) (15,820) (294, 100) 15,820 (278,280) 324,000 36,080 Retained earnings, 1/1 Net income Dividends declared Retained earnings, 12/31 (753,000) (231,000) 80,000 (904,000) (324,000) (104,000) 20,000 (408,000) (789,080) (278,280) 80,000 (987,360) 16,000 4,000 186,000 333,000 o Current assets Investment in Devine Buildings and equipment (net) Trademarks Goodwill Total assets 147,000 544,000 900,000 147,000 405,000 145,000 36,080 67,200 72,900 161,000 580,080 16,800 8,100 1,355,400 356,800 161,000 2,206,200 0 1,738,000 736,000 (514,000) (320,000) (904,000) (228,000) (100,000) (408,000) 100,000 (742,000) (320,000) (987,360) Liabilities Common stock Retained earnings, 12/31 NCI in Devine, 1/1 NCI in Devine, 12/31 Total liabilities and equities 145,020 (145,020) (156,840) (156,840) (2,206,200) (1,738,000) (736,000) 802,080 802,080 b. Prepare a 2015 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, 2015 Sales $ 1,160,250 Cost of goods sold 426,000 Operating expenses 440,150 Total expenses 866,150 Consolidated net income $ 294,100 Noncontrolling interest in CNI $ 58,820 Controlling interest in CNI $ 235,280 *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted. 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? Goodwill decrease to $ 128,800