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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. c. Prepare a worksheet to determine the amounts that should appear on Holland's December 31, 2021, consolidated financial statements.

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. c. Prepare a worksheet to determine the amounts that should appear on Holland's December 31, 2021, consolidated financial statements.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Current assets Investment in Zeeland. Property and equipment (net) Patents Total assets Liabilities Common stock-Holland Common stock-Zeeland Retained earnings 12/31 Total liabilities and owners equity At year-end, there were no intra-entity receivables or payables. Req A and B Accounts Sales Cost of goods sold Depreciation expense Amortization expense 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. c. Prepare a worksheet to determine the amounts that should appear on Holland's December 31, 2021, consolidated financial statements. Complete this question by entering your answers in the tabs below. 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 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 Req C Prepare a worksheet to determine the amounts that should appear on Holland's December 31, 2021, 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. Input all amounts as positive values.) Holland $ (663,900) 336,800 $ 125,200 $ 83,500 589,212 839,000 149,400 $ 1,702,812 83.000 14,200 52,800 (42,636) $ (219,736) $ (392,676) (320,000) e (990,136) $(1,702,812) 589,212 839,000 149,400 0 S HOLLAND CORPORATION AND ZEELAND CORPORATION Consolidation Worksheet For Year Ending December 31, 2021 (392,676) (320,000) (990,136) (1.702,812) Answer is not complete. $ (820,400) $ (301,900) (112,000) (219,736) 50,000 30,000 $ (990,136) $ 125,200 $ (383,900) $ 83,500 0 261,000 149,500 0 $ 1,702,812 $ 494,000 (10,100) (100,000) Zeeland $ (430,500) 201,000 33,800 20,800 62,900 0 $ (112,000) 261,000 149,500 $ 494,000 11,400 29,540 $ (10,100) (100,000) (383,900) $ (494,000) Consolidation Entries Debit Credit 42,636 301,900 18,000 100,000 18,000 (383.900) $ (494,000) $ 503.476 $ 18,000 Noncontrolling Interest 12,000 Consolidated Totals S |$ $ $ $ 1,094,400 537,800 128,200 64,540 115,700 00 248,160 820,400 219,736 50,000 990,136 208,700 Show less A
Transcribed Image Text:Current assets Investment in Zeeland. Property and equipment (net) Patents Total assets Liabilities Common stock-Holland Common stock-Zeeland Retained earnings 12/31 Total liabilities and owners equity At year-end, there were no intra-entity receivables or payables. Req A and B Accounts Sales Cost of goods sold Depreciation expense Amortization expense 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. c. Prepare a worksheet to determine the amounts that should appear on Holland's December 31, 2021, consolidated financial statements. Complete this question by entering your answers in the tabs below. 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 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 Req C Prepare a worksheet to determine the amounts that should appear on Holland's December 31, 2021, 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. Input all amounts as positive values.) Holland $ (663,900) 336,800 $ 125,200 $ 83,500 589,212 839,000 149,400 $ 1,702,812 83.000 14,200 52,800 (42,636) $ (219,736) $ (392,676) (320,000) e (990,136) $(1,702,812) 589,212 839,000 149,400 0 S HOLLAND CORPORATION AND ZEELAND CORPORATION Consolidation Worksheet For Year Ending December 31, 2021 (392,676) (320,000) (990,136) (1.702,812) Answer is not complete. $ (820,400) $ (301,900) (112,000) (219,736) 50,000 30,000 $ (990,136) $ 125,200 $ (383,900) $ 83,500 0 261,000 149,500 0 $ 1,702,812 $ 494,000 (10,100) (100,000) Zeeland $ (430,500) 201,000 33,800 20,800 62,900 0 $ (112,000) 261,000 149,500 $ 494,000 11,400 29,540 $ (10,100) (100,000) (383,900) $ (494,000) Consolidation Entries Debit Credit 42,636 301,900 18,000 100,000 18,000 (383.900) $ (494,000) $ 503.476 $ 18,000 Noncontrolling Interest 12,000 Consolidated Totals S |$ $ $ $ 1,094,400 537,800 128,200 64,540 115,700 00 248,160 820,400 219,736 50,000 990,136 208,700 Show less A
On January 1, 2020, 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 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 On January 1, 2020, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by $57,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $295,400. 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, 2021, follow: Current assets Investment in Zeeland Property and equipment (net) Patents $ 14,200 328, 200 192,600 $ 535,000 Total assets Liabilities Common stock Retained earnings Holland $ (663,900) 336,800 83,000 14, 200 52,800 (42,636) $ (219,736) $ (820,400) (219,736) 50,000 (990, 136) $ $ 215,000 100,000 220,000 $ 535,000 $ Zeeland $ (430,500) 201,000 33,800 20,800 62,900 $ (112,000) $ (301,900) (112,000) 30,000 $ (383,900) 125, 200 589, 212 839,000 149,400 $ 1,702,812 $ $ 83,500 261,000 149,500 494,000
Transcribed Image Text:On January 1, 2020, 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 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 On January 1, 2020, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by $57,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $295,400. 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, 2021, follow: Current assets Investment in Zeeland Property and equipment (net) Patents $ 14,200 328, 200 192,600 $ 535,000 Total assets Liabilities Common stock Retained earnings Holland $ (663,900) 336,800 83,000 14, 200 52,800 (42,636) $ (219,736) $ (820,400) (219,736) 50,000 (990, 136) $ $ 215,000 100,000 220,000 $ 535,000 $ Zeeland $ (430,500) 201,000 33,800 20,800 62,900 $ (112,000) $ (301,900) (112,000) 30,000 $ (383,900) 125, 200 589, 212 839,000 149,400 $ 1,702,812 $ $ 83,500 261,000 149,500 494,000
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