The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.50 per share on January 1, 2014. The remaining 20 percent of Devines shares also traded actively at $6.50 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 $91,500 and a fully amortized trademark with an estimated 10-year remaining life had a $82,000 fair value. At the acquisition date, Devine reported common stock of $100,000 and a retained earnings balance of $209,500.

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

		Holtz Corporation				Devine, Inc.
Sales		$	(746,000	)		$	(386,000	)
Cost of goods sold			272,000				193,000
Operating expenses			286,000				108,000
Dividend income			(16,000	)			0
Net income		$	(204,000	)		$	(85,000	)
Retained earnings, 1/1/15		$	(718,000	)		$	(279,500	)
Net income (above)			(204,000	)			(85,000	)
Dividends declared			60,000				20,000
Retained earnings, 12/31/15		$	(862,000	)		$	(344,500	)
Current assets		$	190,500			$	121,500
Investment in Devine, Inc			520,000				0
Buildings and equipment (net)			824,000				328,000
Trademarks			140,000				215,000
Total assets		$	1,674,500			$	664,500
Liabilities		$	(492,500	)		$	(220,000	)
Common stock			(320,000	)			(100,000	)
Retained earnings, 12/31/15 (above)			(862,000	)			(344,500	)
Total liabilities and equities		$	(1,674,500	)		$	(664,500	)

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

HOLTZ CORPORATION AND DEVINE, INC.
Consolidation Worksheet
For Year Ending December 31, 2015
			Consolidation Entries		Noncontrolling Interest	Consolidated Totals
Accounts	Holtz Corporation	Devine Inc.	Debit	Credit
Sales	(746,000)	(386,000)
Cost of goods sold	272,000	193,000
Operating expenses	286,000	108,000
Dividend income	(16,000)
Separate company net income	(204,000)	(85,000)
Consolidated net income						0
NCI in consolidated net income
Holtzs interest in consolidated net income						0
Retained earnings, 1/1	(718,000)	(279,500)
Net income	(204,000)	(85,000)
Dividends declared	60,000	20,000
Retained earnings, 12/31	(862,000)	(344,500)				0
Current assets	190,500	121,500
Investment in Devine	520,000
Buildings and equipment (net)	824,000	328,000
Trademarks	140,000	215,000
Goodwill	0	0
Total assets	1,674,500	664,500				0
Liabilities	(492,500)	(220,000)
Common stock	(320,000)	(100,000)
Retained earnings, 12/31	(862,000)	(344,500)
NCI in Devine, 1/1
NCI in Devine, 12/31					0
Total liabilities and equities	(1,674,500)	(664,500)	0	0		0

b.

Prepare a 2015 consolidated income statement for Holtz and Devine.

HOLTZ CORPORATION AND DEVINE, INC.
Consolidated Income Statement
For Year Ending December 31, 2015
Total expenses		0
		$0
Noncontrolling interest in CNI
Controlling interest in CNI		$0

c.	If instead the noncontrolling interest shares of Devine had traded for $4.83 surrounding Holtzs acquisition date, what is the impact on goodwill

Goodwill

to