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On January $1,2023,$ Holland Corporation paid $$8$ per share to a group of Zeeland Corporation shareholders to acquire $60,000$ shares of Zeeland$$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 $$7\mathrm{.}00$ per share both before and after the acquisition by Holland. Zeeland$$s acquisition date balance sheet follows:

Current assets $ $15,500$ Liabilities $ $234,500$

Property and equipment $($net$)289,500$ Common stock $100,000$

Patents $209,500$ Retained earnings $180,000$

$ $514,500$ $ $514,500$

On January $1,2023,$ Holland assessed the carrying amount of Zeeland$$s equipment $(5-$year remaining life$)$ to be undervalued by $$52,000.$ Holland also determined that Zeeland possessed unrecorded patents $(10-$year remaining life$)$ worth $$360,000.$ Zeeland$$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 $31,2024,$ follow:

Account Holland Zeeland

Sales $ $(606,000)$ $ $(443,500)$

Cost of goods sold $307,200207,500$

Depreciation expense $76,00032,500$

Amortization expense $15,50019,500$

Other operating expenses $58,00059,000$

Equity in Zeeland earnings $(47,160)0$

Separate company net income $ $(196,460)$ $ $(125,000)$

Retained earnings, $1/1$ $ $(821,700)$ $ $(337,000)$

Net income $(196,460)(125,000)$

Dividends declared $50,00030,000$

Retained earnings, $12/31$ $ $(968,160)$ $ $(432,000)$

Current assets $ $126,500$ $ $96,500$

Investment in Zeeland $575,5200$

Property and equipment $($net$)852,000274,000$

Patents $152,000166,500$

Total assets $ $1,706,020$ $ $537,000$

Liabilities $ $(417,860)$ $ $(5,000)$

Common stock$$Holland $(320,000)0$

Common stock$$Zeeland $0(100,000)$

Retained earnings, $12/31(968,160)(432,000)$

Total liabilities and owners' equity $ $(1,706,020)$ $ $(537,000)$

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

Required:

a$1.$ Compute the amount of goodwill recognized in Holland's acquisition of Zeeland.

a$2.$ Show the allocation of goodwill to the controlling and noncontrolling interest.

b$.$ Show how Holland determined its December $31,2024,$ Investment in Zeeland account balance.

c$.$ Prepare a worksheet to determine the amounts that should appear on Holland$$s December $31,2024,$ consolidated financial statements.

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