The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.55 per share on January 1, 2020. The remaining 20 percent of Devines shares also traded actively at $6.55 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 $59,500 and a fully amortized trademark with an estimated 10-year remaining life had a $66,000 fair value. At the acquisition date, Devine reported common stock of $100,000 and a retained earnings balance of $194,500.

Following are the separate financial statements for the year ending December 31, 2021:

	Holtz Corporation				Devine, Inc.
Sales	$	(704,000	)		$	(439,000	)
Cost of goods sold		260,000				171,000
Operating expenses		249,000				120,000
Dividend income		(16,000	)			0
Net income	$	(211,000	)		$	(148,000	)
Retained earnings, 1/1/21	$	(735,000	)		$	(264,500	)
Net income (above)		(211,000	)			(148,000	)
Dividends declared		70,000				20,000
Retained earnings, 12/31/21	$	(876,000	)		$	(392,500	)
Current assets	$	194,500			$	201,500
Investment in Devine, Inc.		524,000				0
Buildings and equipment (net)		837,500				332,000
Trademarks		150,000				159,000
Total assets	$	1,706,000			$	692,500
Liabilities	$	(510,000	)		$	(200,000	)
Common stock		(320,000	)			(100,000	)
Retained earnings, 12/31/21 (above)		(876,000	)			(392,500	)
Total liabilities and equities	$	(1,706,000	)		$	(692,500	)

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

1. Prepare a worksheet to consolidate these two companies as of December 31, 2021.

2. Prepare a 2021 consolidated income statement for Holtz and Devine.

3. If instead the noncontrolling interest shares of Devine had traded for $4.20 surrounding Holtzs acquisition date, what is the impact on goodwill?

Accounts Noncontrolling Interest Consolidated Totals Sales onsolidation worksheet For Year Ending December 31, 2021 Holtz Devine Consolidation Entries Corporation Inc. Debit Credit s $ (704.000) (430.000) 280.000 171.000 240.000 120.000 18.500 (10,000) 0 16.000 $ $ 211,000) (148.000) $ (1.143,000) 431.000 387.500 0 ON 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 $ (25.000) (324,500) 25.900 298.800 $ 284,500 41.200 $ 778.200 Retained earnings. 1/1/21 Net income Dividends declared $ (735,000) (211,000) 70.000 $ (204.500) (148,000) 20.000 IS (392.500) 10.000 4.000 (288,600) 70.000 $ (1,004,800) Retained earnings. 12/31/21 s (876,000) $ $ 201,500 $ 395.000 0 0 Current assets Investment in Devine, Inc. Buildings and equipment (net) Trademarks Goodwill 194,500 524,000 837.500 150.000 0 41,200 47.800 565,200 11.000 332.000 150,000 0 Blo 6.600 59.400 235,000 1.205.200 381.800 235,000 Goodwill 0 0 235.000 235,000 2.198.000 Total assets $ 1,706.000 $ 692,500 $ Liabilities $ (710,000) $ 510,000) (320,000) (870,000) $ (200.000) (100.000) (382.500) 100.000 (320.000) (1,004,500) lo Common stock Retained earnings, 12/31/21 (above) NCI in Devine, 1/1 NCI in Devine. 12/31 141,300 (141,300) X (171,200) (171.200) X (2.108.000) Total liabilities and equities $ (1.700.000) $ (602.500) S 782.200 $ 782,200 $ HOLTZ CORPORATION AND DEVINE, INC. Consolidated Income Statement For Year Ending December 31, 2021 Sales $ 1,143,000 Operating expenses 431,000 X Cost of goods sold 387,500 X Total expenses 818,500 Consolidated net income IS 324,500 To noncontrolling interest $ (25.000) X To Holtz Corporation $ 350.400 $