The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.45 per share on January 1, 2020. The remaining 20 percent of Devine's shares also traded actively at $6.45 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 $65,500 and a fully amortized trademark with an estimated 10-year remaining life had a $85,000 fair value. At the acquisition date, Devine reported common stock of $100,000 and a retained earnings balance of $224,500. Following are the separate financial statements for the year ending December 31, 2021: Devine, Inc. $ (432,750) 135,000 126,750 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 $ (747,000) 207,000 338,000 (16,000) $ (218,000) $ (725,000) (218,000) 50,000 $ (893, 000) $ 167,000 516,000 880,000 145,000 $ 1,708,000 $ (495,000) (320,000) (893,000) $ (1,708,000) $ (171,000) $ (294,500) (171,000) 20,000 $ (445,500) $ 184,500 363,000 214,000 $ 761,500 $ (216,000) (100,000) (445,500) $ (761,500) 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 $4.75 surrounding Holtz's acquisition date, what is the impact on goodwill? Required A Required B Required Prepare a worksheet to consolidate these two companies as of December 31, 2021. (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. Input all amounts as positive values.) Show less HOLTZ CORPORATION AND DEVINE, INC. Consolidation Worksheet For Year Ending December 31, 2021 Holtz Consolidation Entries Accounts Corporation Devine Inc. Noncontrolling Consolidated Debit Credit Interest Totals Sales $ (747,000) S (432,750) Cost of goods sold 207.000 135,000 Operating expenses 338,000 126,750 Dividend income (16,000) 0 Separate company net income $ (218,000) S (171,000) Consolidated net income NI attributable to noncontrolling interest NI attributable to Holtz Corp Retained earnings, 1/1/21 Net income Dividends declared Retained earnings, 12/31/21 $ (725.000) $ (294 500) (218,000) (171,000) 50.000 20,000 $ (893,000) S (445,500) Current assets Investment in Devine, Inc. Buildings and equipment (net) Trademarks Goodwill Total assets $ 167,000 $184,500 516,000 0 880,000 363,000 145.000 214,000 0 0 $ 1,708,000 $ 761,500 $ (495,000) $ (216,000) (320.000) (100,000) (893 000) (445 500) Liabilities Common stock Retained earnings, 12/31/21 (above) NCI in Devine, 1/1 NCI in Devine, 12/31 Total liabilities and equities $(1,708,000) S (761,500) (Required A Required B Required A Required B Required Prepare a 2021 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, 2021 Total expenses To noncontrolling interest To Holtz Corporation Required A Required B Required If instead the noncontrolling interest shares of Devine had traded for $4.75 surrounding Holtz's acquisition date, what is the impact on goodwill? Goodwill to
