On January 1, 2023, Holland Corporation paid $7 per share to a group of Zeeland Corporation...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On January 1, 2023, Holland Corporation paid $7 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 $5.00 per share both before and after the acquisition by Holland. Zeeland's acquisition date balance sheet follows: $ Current assets $ 16,400 Liabilities Property and equipment (net) Patents 248,000 210,400 Common stock 100,000 221,200 Retained earnings 100,000 $ 448,000 $ 448,000 On January 1, 2023, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by $43,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $246,400. 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 Sales Cost of goods sold Depreciation expense Amortization expense Other operating expenses Equity in Zeeland earnings Separate company net income Retained earnings, 1/1 Net income Dividends declared Retained earnings, 12/31 Retai Current assets Current Investment in Zeeland Property Property and equipment (net) Patents Total assets Liabilities Common stock-Holland Common stock-Zeeland Retained earnings, 12/31 Holland $ (500,700) 254,100 62,500 Zeeland $ (452,500) 212,000 31,600 16,400 18,600 56,300 0 61,600 (60,456) $ (166,556) $ (822,600) (166,556) 59.999 50,000 $ (939,156) $ 127,400 599,292 861,000 153,800 $ 1,741,492 $ (482,336) (320,000) $ (134,000) $ (361,300) (134,000) 30,000 $ (465,300) $ 105,500 283,000 180,500 $569,000 $ (3,700) 0 (100,000) (465,300) 0 (939,156) $ Total liabilities and owners' equity (1,741,492) $ (569,000) At year-end, there were no intra-entity receivables or payables. Required: a1. Compute the amount of goodwill recognized in Holland's acquisition of Zeeland. a2. 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. Complete this question by entering your answers in the tabs below. Req A and B Req C a1. Compute the amount of goodwill recognized in Holland's acquisition of Zeeland. a2. 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. Note: Negative amounts should be shown with a minus sign. Amount a1. Goodwill Controlling Interest Noncontrolling interest a2. Goodwill allocation b. Initial Value b. Change in Zeeland's Retained earnings b. Excess amortization b. Investment in Zeeland Req A and B Req C Amount $ Show less Prepare a worksheet to determine the amounts that should appear on Holland's December 31, 2024, consolidated financial statements. Note: 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. Input all amounts as positive values. Show less Sales Cost of goods sold Depreciation expense Amortization expense HOLLAND CORPORATION AND ZEELAND CORPORATION Consolidation Worksheet For Year Ending December 31, 2024 Consolidation Entries Accounts Holland Zeeland Debit Credit Noncontrolling Consolidated Interest Totals $ (500,700) $ (452,500) 254,100 212,000 62,500 31,600 16,400 18,600 61,600 56,300 (60,456) 0 Other operating expenses Equity in Zeeland earnings Separate company net income Consolidated net income Noncontrolling interest in consolidated net income Controlling interest net income Retained earnings, 1/1 Net income Dividends declared Retained earnings, 12/31 Current assets Investment in Zeeland, Incorporated $ (166,556) $ (134,000) $ (822,600) $ (361,300) $ (166,556) 50,000 (134,000) 30,000 (939,156) $ (465,300) $ 127,400 $ 105,500 Property and equipment (net) Patents Goodwill Total assets Liabilities Common stock Noncontrolling interest Retained earnings, 12/31 599,292 0 861,000 153,800 283,000 180,500 0 $ 1,741,492 $ (482,336) 569,000 (3,700) (320,000) (100,000) (939,156) (465,300) Total liabilities and equities $ (1,741,492) $ (569,000) $ 0 $ 0 < Req A and B Req C > On January 1, 2023, Holland Corporation paid $7 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 $5.00 per share both before and after the acquisition by Holland. Zeeland's acquisition date balance sheet follows: $ Current assets $ 16,400 Liabilities Property and equipment (net) Patents 248,000 210,400 Common stock 100,000 221,200 Retained earnings 100,000 $ 448,000 $ 448,000 On January 1, 2023, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by $43,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $246,400. 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 Sales Cost of goods sold Depreciation expense Amortization expense Other operating expenses Equity in Zeeland earnings Separate company net income Retained earnings, 1/1 Net income Dividends declared Retained earnings, 12/31 Retai Current assets Current Investment in Zeeland Property Property and equipment (net) Patents Total assets Liabilities Common stock-Holland Common stock-Zeeland Retained earnings, 12/31 Holland $ (500,700) 254,100 62,500 Zeeland $ (452,500) 212,000 31,600 16,400 18,600 56,300 0 61,600 (60,456) $ (166,556) $ (822,600) (166,556) 59.999 50,000 $ (939,156) $ 127,400 599,292 861,000 153,800 $ 1,741,492 $ (482,336) (320,000) $ (134,000) $ (361,300) (134,000) 30,000 $ (465,300) $ 105,500 283,000 180,500 $569,000 $ (3,700) 0 (100,000) (465,300) 0 (939,156) $ Total liabilities and owners' equity (1,741,492) $ (569,000) At year-end, there were no intra-entity receivables or payables. Required: a1. Compute the amount of goodwill recognized in Holland's acquisition of Zeeland. a2. 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. Complete this question by entering your answers in the tabs below. Req A and B Req C a1. Compute the amount of goodwill recognized in Holland's acquisition of Zeeland. a2. 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. Note: Negative amounts should be shown with a minus sign. Amount a1. Goodwill Controlling Interest Noncontrolling interest a2. Goodwill allocation b. Initial Value b. Change in Zeeland's Retained earnings b. Excess amortization b. Investment in Zeeland Req A and B Req C Amount $ Show less Prepare a worksheet to determine the amounts that should appear on Holland's December 31, 2024, consolidated financial statements. Note: 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. Input all amounts as positive values. Show less Sales Cost of goods sold Depreciation expense Amortization expense HOLLAND CORPORATION AND ZEELAND CORPORATION Consolidation Worksheet For Year Ending December 31, 2024 Consolidation Entries Accounts Holland Zeeland Debit Credit Noncontrolling Consolidated Interest Totals $ (500,700) $ (452,500) 254,100 212,000 62,500 31,600 16,400 18,600 61,600 56,300 (60,456) 0 Other operating expenses Equity in Zeeland earnings Separate company net income Consolidated net income Noncontrolling interest in consolidated net income Controlling interest net income Retained earnings, 1/1 Net income Dividends declared Retained earnings, 12/31 Current assets Investment in Zeeland, Incorporated $ (166,556) $ (134,000) $ (822,600) $ (361,300) $ (166,556) 50,000 (134,000) 30,000 (939,156) $ (465,300) $ 127,400 $ 105,500 Property and equipment (net) Patents Goodwill Total assets Liabilities Common stock Noncontrolling interest Retained earnings, 12/31 599,292 0 861,000 153,800 283,000 180,500 0 $ 1,741,492 $ (482,336) 569,000 (3,700) (320,000) (100,000) (939,156) (465,300) Total liabilities and equities $ (1,741,492) $ (569,000) $ 0 $ 0 < Req A and B Req C >
Expert Answer:
Related Book For
Advanced Accounting
ISBN: 978-1259444951
13th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni
Posted Date:
Students also viewed these accounting questions
-
9. What kind of characteristics do junk bonds have?
-
Coca-Cola is seeking: To determine the effect of age on intention to purchase Coke Zero; To examine the effect of price on intention to purchase Coke Zero. What are the independent variable(s) and...
-
Shania consumes music CDs and food. Her utility function is U(F,C) = 50C+F, where C is the number of CDs and F is pounds of food. Her monthly income is $M, food costs $1 per pound, and CDs cost $10...
-
A 4.4810 3 kg train is stopped at a station. The train must go around a 181 m diameter corner right after it leaves the station. As the train leaves the station it provides a constant forward force...
-
A wire of diameter \(d\) is stretched along the centerline of a pipe of diameter \(D\). For a given pressure drop per unit length of pipe, by how much does the presence of the wire reduce the...
-
Because a levy of property taxes creates a lien on taxable property, there is no need to reduce anticipated revenues for uncollectible amounts or to write-off delinquent taxes. Do you agree or...
-
Design a Moore FSM to detect if an input sequence is divisible by 5. Each cycle a new bit comes as input towards LSB (e.g. if the current sequence is '1011' and the input is '0', the new sequence is...
-
Kevin Spear invested $18,000 today in a fund that earns 12% compounded annually. To what amount will the investment grow in 3 years? To what amount would the investment grow in 3 years if the fund...
-
You can buy EURUSD in the London market at 1.1900, you can buy USDCHF in New York at 0.9500, and you can sell EURCHF in Zurich at 1.1405. Given this information, is there an arbitrage opportunity?...
-
ARTICLE...
-
You will be provided a car price of either: $12k, $16k, $20k, $24k, $28k, $32k, $36k, $40k, $44k, or $48k 1. Suppose you have $4000 saved up for a down payment, and you plan to finance the rest of...
-
Naiser has current wages of $ 1 5 , 6 0 0 . 0 0 and year - to - date earnings of $ 2 0 8 , 0 0 0 . Naiser has 2 0 2 2 HI withholding, for this pay period, is: $ The supplemental withholding, for this...
-
Medicare has seen a steady increase and reliance on non-physician practitioners (such as Nurse Practitioners and Physician Assistants) to treat patients. Explain how Medicare reimburses for their...
-
Answer the following questions. 1. What precautions must be taken before using Bug Kill? 2. If Bug kill gets in someones eyes or mouth, what should be done? 3. What precautions should be taken after...
-
An access route is being constructed across a field (Figure Q8). Apart from a relatively firm strip of ground alongside the field's longer side AB, the ground is generally marshy. The route can...
-
The following data refer to a compound impulse turbine having two rows of moving blades and one row of fixed blades in between them. Nozzle angle \(=15^{\circ}\), Exit velocity of steam from the...
-
In a stage of impulse-reaction turbine, steam enters with a speed of \(250 \mathrm{~m} / \mathrm{s}\) at an angle of \(30^{\circ}\) in the direction of blade motion. The mean blade speed is \(150...
-
A simple impulse turbine has one ring of moving blades running at \(150 \mathrm{~m} / \mathrm{s}\). The absolute velocity of steam at exit from the stage is \(80 \mathrm{~m} / \mathrm{s}\) at an...
Study smarter with the SolutionInn App