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On January 1, 2017, Holland Corporation paid $9 per share to a group of Zeeland Corporation shareholders to acquire 60,000 shares of Zeeland's outstanding voting stock, representing a 60 percent ownership Interest. The remaining 40,000 shares of Zeeland continued to trade in the market close to its recent average of $8.00 per share both before and after the acquisition by Holland. Zeeland's acquisition date balance sheet follows: Current assets Property and equipment (net) Patents $ 14,300 328,300 193,900 $536,500 Liabilities Common stock Retained earnings $ 216,500 100,000 220,000 $536,500 On January 1, 2017, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by $58,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $300,600. Zeeland's acquisition date fair values for its current assets and liabilities were equal to their carrying amounts. Any remaining excess of Zeeland's acquisition-date fair value over its book value was attributed to goodwill. The companies' financial statements for the year ending December 31, 2018, follow: Holland Zeeland Sales $ (675, 600) $(431,500) Cost of goods sold 342,700 201,500 Depreciation expense 84,500 33,700 Amortization expense 14,300 20,700 Other operating expenses 53,200 62,680 Equity in Zeeland earnings (42 804) @ Separate company net income $ (223, 704) $(113, 000) Retained earnings 1/1 $ (820,500) $(304,600) Net income (223, 784) (113,000) Dividends declared 50,000 30,000 Retained earnings 12/31 $ (994,204) $(387,600) Current assets $ 125,300 $ 84,500 Investment in Zeeland 590,568 @ Property and equipment (net) 840,000 262,000 Patents 149,600 150, 500 Total assets $ 1,705,468 $ 497,000 Liabilities Common stock - Holland Common stock - Zeeland Retained earnings 12/31 Total liabilities and owners equity $ (391,264) (320,000) @ (994,204) $(1,705,468) $ (9,400) (100,000) (387,600) $(497,000) At year-end, there were no intra-entity receivables or payables. Liabilities Common stock - Holland Common stock - Zeeland Retained earnings 12/31 Total liabilities and owners equity $ (391,264) (320,000) (994,204) $(1,705,468) $ (9,400) 9 (100,000) (387,600) $(497,000) At year-end, there were no intra-entity receivables or payables. a. Compute the amount of goodwill recognized in Holland's acquisition of Zeeland and the allocation of goodwill to the controlling and noncontrolling interest. b. Show how Holland determined its December 31, 2018, Investment in Zeeland account balance. c. Prepare a worksheet to determine the amounts that should appear on Holland's December 31, 2018, consolidated financial statements. Complete this question by entering your answers in the tabs below. Req A and B Reqc a. Compute the amount of goodwill recognized in Holland's acquisition of Zeeland and the allocation of goodwill to the controlling and noncontrolling interest. b. Show how Holland determined its December 31, 2018, Investment in Zeeland account balance. Show less Amount Goodwill Controlling Interest NCI a2. Goodwill allocation Amount b. Investment in Zeeland 12/31/18 Seved Reg A and B Reg C Prepare a worksheet to determine the amounts that should appear on Holland's December 31, 2018, consolidated financial statements. (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. Amounts in the Debit and Credit columns should be entered as positive. Negative amounts for the Noncontrolling Interest and Consolidated Totals columns should be entered with a minus sign.) Show less Consolidated Totals HOLLAND CORPORATION AND ZEELAND CORPORATION Consolidation Worksheet For Year Ending December 31, 2018 Consolidation Entries Noncontrolling Holland Zeeland Debit Credit Interest $ (675,600) $ (431,500) 342,700 201,500 84,500 33,700 14,300 20,700 53,200 62,600 (42,804) 0 $ (223,704) $ (113,000) Accounts Sales Cost of goods sold Depreciation expense Amortization expense Other operating expenses Equity in Zeeland earnings Separate company net income Consolidated net income Noncontrolling interest in CNI Controlling interest net income Retained earnings, 1/1/18 Net Income Dividends declared Retained earnings, 12/31 Current assets Investment in Zeeland, Inc Property and equipment (not) Patents Goodwill Total assets Liabilities Common stock Noncontrolling interest Retained earnings, 12/31 Total liabilities and equities $ (820,500) $ (304.600) (223,704) (113,000) 50,000 30,000 $ (994,204) $ (387,600) $ 125,300 $ 84,500 590,568 0 840,000 262.000 149,600 150,500 0 0 $ 1,705,468 $ 497,000 (391,264) (9,400) (320,000) (100,000) (994.204) (387.600) $ (1.705.468) S (497.000) On January 1, 2017, Holland Corporation paid $9 per share to a group of Zeeland Corporation shareholders to acquire 60,000 shares of Zeeland's outstanding voting stock, representing a 60 percent ownership Interest. The remaining 40,000 shares of Zeeland continued to trade in the market close to its recent average of $8.00 per share both before and after the acquisition by Holland. Zeeland's acquisition date balance sheet follows: Current assets Property and equipment (net) Patents $ 14,300 328,300 193,900 $536,500 Liabilities Common stock Retained earnings $ 216,500 100,000 220,000 $536,500 On January 1, 2017, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by $58,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $300,600. Zeeland's acquisition date fair values for its current assets and liabilities were equal to their carrying amounts. Any remaining excess of Zeeland's acquisition-date fair value over its book value was attributed to goodwill. The companies' financial statements for the year ending December 31, 2018, follow: Holland Zeeland Sales $ (675, 600) $(431,500) Cost of goods sold 342,700 201,500 Depreciation expense 84,500 33,700 Amortization expense 14,300 20,700 Other operating expenses 53,200 62,680 Equity in Zeeland earnings (42 804) @ Separate company net income $ (223, 704) $(113, 000) Retained earnings 1/1 $ (820,500) $(304,600) Net income (223, 784) (113,000) Dividends declared 50,000 30,000 Retained earnings 12/31 $ (994,204) $(387,600) Current assets $ 125,300 $ 84,500 Investment in Zeeland 590,568 @ Property and equipment (net) 840,000 262,000 Patents 149,600 150, 500 Total assets $ 1,705,468 $ 497,000 Liabilities Common stock - Holland Common stock - Zeeland Retained earnings 12/31 Total liabilities and owners equity $ (391,264) (320,000) @ (994,204) $(1,705,468) $ (9,400) (100,000) (387,600) $(497,000) At year-end, there were no intra-entity receivables or payables. Liabilities Common stock - Holland Common stock - Zeeland Retained earnings 12/31 Total liabilities and owners equity $ (391,264) (320,000) (994,204) $(1,705,468) $ (9,400) 9 (100,000) (387,600) $(497,000) At year-end, there were no intra-entity receivables or payables. a. Compute the amount of goodwill recognized in Holland's acquisition of Zeeland and the allocation of goodwill to the controlling and noncontrolling interest. b. Show how Holland determined its December 31, 2018, Investment in Zeeland account balance. c. Prepare a worksheet to determine the amounts that should appear on Holland's December 31, 2018, consolidated financial statements. Complete this question by entering your answers in the tabs below. Req A and B Reqc a. Compute the amount of goodwill recognized in Holland's acquisition of Zeeland and the allocation of goodwill to the controlling and noncontrolling interest. b. Show how Holland determined its December 31, 2018, Investment in Zeeland account balance. Show less Amount Goodwill Controlling Interest NCI a2. Goodwill allocation Amount b. Investment in Zeeland 12/31/18 Seved Reg A and B Reg C Prepare a worksheet to determine the amounts that should appear on Holland's December 31, 2018, consolidated financial statements. (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. Amounts in the Debit and Credit columns should be entered as positive. Negative amounts for the Noncontrolling Interest and Consolidated Totals columns should be entered with a minus sign.) Show less Consolidated Totals HOLLAND CORPORATION AND ZEELAND CORPORATION Consolidation Worksheet For Year Ending December 31, 2018 Consolidation Entries Noncontrolling Holland Zeeland Debit Credit Interest $ (675,600) $ (431,500) 342,700 201,500 84,500 33,700 14,300 20,700 53,200 62,600 (42,804) 0 $ (223,704) $ (113,000) Accounts Sales Cost of goods sold Depreciation expense Amortization expense Other operating expenses Equity in Zeeland earnings Separate company net income Consolidated net income Noncontrolling interest in CNI Controlling interest net income Retained earnings, 1/1/18 Net Income Dividends declared Retained earnings, 12/31 Current assets Investment in Zeeland, Inc Property and equipment (not) Patents Goodwill Total assets Liabilities Common stock Noncontrolling interest Retained earnings, 12/31 Total liabilities and equities $ (820,500) $ (304.600) (223,704) (113,000) 50,000 30,000 $ (994,204) $ (387,600) $ 125,300 $ 84,500 590,568 0 840,000 262.000 149,600 150,500 0 0 $ 1,705,468 $ 497,000 (391,264) (9,400) (320,000) (100,000) (994.204) (387.600) $ (1.705.468) S (497.000)

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