The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $7.20 per share on January 1, 2014. The remaining 20 percent of Devine’s shares also traded actively at $7.20 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 $85,500 and a fully amortized trademark with an estimated 10-year remaining life had a $64,000 fair value. At the acquisition date, Devine reported common stock of $100,000 and a retained earnings balance of $226,500.

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

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.
b. Prepare a 2015 consolidated income statement for Holtz and Devine.
c. If instead the noncontrolling interest shares of Devine had traded for $4.76 surrounding Holtz’s acquisition date, what is the impact ongoodwill?

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Holtz Corporation Devine, Inc. Sales Cost of goods sold Operating expenses Dividend income. $ (641,000) $(399,000) 176,000 126,000 198,000 273,000 (16,000) $ (186,000) $ (97,000) $ (762,000) $(296,500) (186,000) (97,000) 20,000 $ (878,000) $(373,500) Net income Retained earnings, 1/1/15 Net income (above) Dividends declared 70,000 Retained earnings, 12/31/15 .. $ 121,000 120,500 Current assets Investment in Devine, Inc. Buildings and equipment (net) Trademarks 576,000 887,000 335,000 236,000 $1,733,000 691,500 149,000 Total assets Liabilities. Common stock Retained earnings, 12/B1/15 (above) . .. $(535,000) $(218,000) (320,000) 100,000) (878,000) (373,500) $(1,733,000) $(691,500) Total liabilities and equities