The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $7.50 per share on January 1, 2017. The remaining 20 percent of Devine's shares also traded actively at $7.50 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 life was undervalued by $46,500 and a fully amortized trademark with an estimated 10-year remaining life had a $76,000 fair value. At the acquisition date, Devine reported common stock of $100,000 and a retained earnings balance of $351,500.

      Following are the separate financial statements for the year ending December 31, 2015:

		Holtz Corporation				Devine, Inc.
Sales		$	(786,000	)		$	(379,000	)
Cost of goods sold			291,000				118,000
Operating expenses			289,000				78,000
Dividend income			(16,000	)			0
Net income		$	(222,000	)		$	(183,000	)
Retained earnings, 1/1/15		$	(733,000	)		$	(421,500	)
Net income (above)			(222,000	)			(183,000	)
Dividends declared			90,000				20,000
Retained earnings, 12/31/15		$	(865,000	)		$	(584,500	)
Current assets		$	311,500			$	272,500
Investment in Devine, Inc			600,000				0
Buildings and equipment (net)			722,500				456,000
Trademarks			156,000				212,000
Total assets		$	1,790,000			$	940,500
Liabilities		$	(605,000	)		$	(256,000	)
Common stock			(320,000	)			(100,000	)
Retained earnings, 12/31/15 (above)			(865,000	)			(584,500	)
Total liabilities and equities		$	(1,790,000	)		$	(940,500	)

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

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

     

b.	Prepare a 2015 consolidated income statement for Holtz and Devine. (Enter all amounts as positive values.)

c.	If instead the non controlling interest shares of Devine had traded for $5.74 surrounding Holtz's acquisition date, what is the impact on goodwill?