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On January 1, 2020, Holland Corporation paid $8 per share to a group of Zeeland Corporation shareholders to acquire 60,000 shares of Zeelands 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 $6.00 per share both before and after the acquisition by Holland. Zeelands acquisition date balance sheet follows:

Current assets $ 16,300 Liabilities $ 246,500

Property and equipment (net) 250,300 Common stock 100,000

Patents 219,900 Retained earnings 140,000

$ 486,500 $ 486,500

On January 1, 2020, Holland assessed the carrying amount of Zeelands equipment (5-year remaining life) to be undervalued by $44,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $307,400. Zeelands acquisition-date fair values for its current assets and liabilities were equal to their carrying amounts. Any remaining excess of Zeelands acquisition-date fair value over its book value was attributed to goodwill.

The companies financial statements for the year ending December 31, 2021, follow:

Holland Zeeland

Sales $ (512,400 ) $ (451,500 )

Cost of goods sold 260,000 211,500

Depreciation expense 64,000 31,700

Amortization expense 16,300 18,700

Other operating expenses 61,200 56,600

Equity in Zeeland earnings (56,076 ) 0

Separate company net income $ (166,976 ) $ (133,000 )

Retained earnings 1/1 $ (822,500 ) $ (358,600 )

Net income (166,976 ) (133,000 )

Dividends declared 50,000 30,000

Retained earnings 12/31 $ (939,476 ) $ (461,600 )

Current assets $ 127,300 $ 104,500

Investment in Zeeland 625,512 0

Property and equipment (net) 860,000 282,000

Patents 153,600 179,500

Total assets $ 1,766,412 $ 566,000

Liabilities $ (506,936 ) $ (4,400 )

Common stockHolland (320,000 ) 0

Common stockZeeland 0 (100,000 )

Retained earnings 12/31 (939,476 ) (461,600 )

Total liabilities and owners equity $ (1,766,412 ) $ (566,000 )

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

Compute the amount of goodwill recognized in Hollands acquisition of Zeeland and the allocation of goodwill to the controlling and noncontrolling interest.

Show how Holland determined its December 31, 2021, Investment in Zeeland account balance.

Prepare a worksheet to determine the amounts that should appear on Hollands December 31, 2021, 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, 2021, Investment in Zeeland account balance. (Negative amounts should be shown with a minus sign.) Show less Amount a1. Goodwill Controlling Interest NCI a2. Goodwill allocation Amount b. Initial Value Change in Zeeland's RE Excess amortization Investment in Zeeland b. Noncontrolling Interest Consolidated Totals Accounts Sales HOLLAND CORPORATION AND ZEELAND CORPORATION Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Holland Zeeland Debit Credit $ (512,400) $ (451,500) 260,000 211,500 64,000 31,700 16,300 18,700 61,200 56,600 (56,076) 0 $ (166,976) $ (133,000) 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 Net income Dividends declared Retained earnings 12/31 $ (822,500) $ (358,600) (166,976) (133,000) 50,000 30,000 $ (939,476) $ (461,600) Noncontrolling interest in CNI Controlling interest net income Retained earnings 1/1 Net income Dividends declared Retained earnings 12/31 Current assets Investment in Zeeland, Inc Property and equipment (net) Patents Goodwill Total assets Liabilities Common stock Noncontrolling interest Retained earnings 12/31 Total liabilities and equities $ 822,500) S (358,600) (166,976) (133,000) 50,000 30,000 $ (939,476) $ (461,600) $ 127,300 $ 104,500 625,512 0 860,000 282,000 153,600 179,500 0 0 $ 1,766,412 S 566,000 (506,936) (4,400) (320,000) (100,000) (939,476) (461,600) $ (1,766,412) S (566,000)

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