Question: Please help me with this problem, thank you! On January 1, 2023, Holland Corporation paid $8 per share to a group of Zeeland Corporation shareholders

Please help me with this problem, thank you!Please help me with this problem, thank you! On January 1, 2023,Holland Corporation paid $8 per share to a group of Zeeland Corporationshareholders 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

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 $7.00 per share both before and after the acquisition by Holland. Zeeland's acquisition date balance sheet follows: On January 1, 2023, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by $64,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $345, 200. 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: 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. 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. \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|} \hline \multirow{2}{*}{\begin{tabular}{|l|l|} & Accounts \\ Sales \end{tabular}} & \multicolumn{2}{|r|}{ Holland } & \multicolumn{2}{|c|}{ Zeeland } & \multicolumn{2}{|r|}{ Debit } & Credit & \multirow[t]{2}{*}{\begin{tabular}{c} Noncontrolling \\ Interest \end{tabular}} & \multicolumn{2}{|c|}{\begin{tabular}{l} Consolidated \\ Totals \end{tabular}} \\ \hline & $ & (745,800) & $ & (437,500) & & & & & $ & 1,183,300 \\ \hline Cost of goods sold & & 378,100 & & 204,500 & & & & & & 582,600 \\ \hline Depreciation expense & & 93,500 & & 33,100 & & & & & & \\ \hline Amortization expense & & 14,900 & & 20,100 & & & & & & \\ \hline Other operating expenses & & 55,600 & & 60,800 & & & & & & 116,400 \\ \hline Equity in Zeeland earnings & & (43,008) & & 0 & & 43,008 & & & & \\ \hline Separate company net income & $ & (246,708) & $ & (119,000) & & & & & & \\ \hline \multicolumn{11}{|l|}{ Consolidated net income } \\ \hline \multicolumn{11}{|c|}{ Noncontrolling interest in consolidated net income } \\ \hline \multicolumn{11}{|l|}{ Controlling interest net income } \\ \hline Retained earnings, 1/1 & $ & (821,100) & $ & (320,800) & & 320,800 & & 7 & $ & 821,100 \\ \hline Net income & & (246,708) & & (119,000) & & & & & & 246,708 \\ \hline Dividends declared & & 50,000 & & 30,000 & & & 18,000 & 12,000 & & 50,000 \\ \hline Retained earnings, 12/31 & & (1,017,808) & $ & (409,800) & & & & & & \\ \hline Current assets & $ & 125,900 & $ & 90,500 & & & & & $ & 216,400 \\ \hline Investment in Zeeland, Incorporated & & 561,096 & & 0 & & 18,000 & 579,096 & & & \\ \hline Property and equipment (net) & & 846,000 & & 268,000 & & & & & & \\ \hline Patents & & 150,800 & & 156,500 & & & & & & \\ \hline Goodwill & & 0 & & 0 & & 70,800 & & & & 70,800 \\ \hline Total assets & $ & 1,683,796 & $ & 515,000 & & & & & & \\ \hline Liabilities & & (345,988) & & (5,200) & & & & & & 351,188 \\ \hline Common stock & & (320,000) & & (100,000) & & 100,000 & & & & 320,000 \\ \hline \multicolumn{11}{|l|}{ Noncontrolling interest } \\ \hline Retained earnings, 12/31 & & (1,017,808) & & (409,800) & & & & & & 1,017,808 \\ \hline Total liabilities and equities & & (1,683,796) & $ & (515,000) & $ & 552,608 & $597,096 & & & \\ \hline \end{tabular}

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!