On January 1, 2023, Holland Corporation paid $7 per share to a group of Zeeland Corporation shareholders to acquire 60,000 sharesof Zeeland's outstanding voting stock, representing a 60 percent ownership interest. The remaining 40,000 shares of Zeelandcontinued 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 assetsProperty and equipment (net)Patents$14,700 Liabilities288,708 Common stock199,100 Retained earnings$422,500$222,500100,000100,000$ 422,500On January 1, 2023, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by$62,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $226,900. Zeeland'sacquisition-date fair values for its current assets and liabilities were equal to their carrying amounts. Any remaining excess of Zeeland'sacquisition-date fair value over its book value was attributed to goodwill.The companies' financial statements for the year ending December 31, 2024, follow:SalesAccountZeelandHolland$ (722,400)366,300$ (435,500)203,500Cost of goods soldDepreciation expenseAmortization expenseOther operating expensesEquity in Zeeland earningsSeparate company net incomeRetained earnings, 1/1Net incomeDividends declaredRetained earnings, 12/31Current assetsInvestment in ZeelandProperty and equipment (net)PatentsTotal assetsLiabilitiesCommon stock-HollandCommon stock-ZeelandRetained earnings, 12/31Total liabilities and owners' equity90,50014,70054,800(49,146)$ (245,246)$ (820,900)(245,246)50,000$ (1,816,146)$ 125,700559,332844,000150,400$1,679,432$ (343,286)(320,000)В(1,816,146)$ (1,679,432)At year-end, there were no intra-entity receivables or payables.Required:33,30020,30061,400В$ (117,000)$ (315,400)(117,000)30,000$ (482,480)$ 88,500В266,000154,500$ 509,000$ (6,680)В(100,000)(482,480)$ (509,000)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 financialstatements.Complete this question by entering your answers in the tabs below.Req A and BReq Ca1. 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.Amounta1. Goodwill$100,700Controlling InterestNoncontrollingInteresta2. Goodwill allocationb. Initial ValueAmountShow less A

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 Property and equipment (net) Patents $ 14,700 Liabilities 208,700 Common stock 199,100 Retained earnings $422,500 $222,500 100,000 100,000 $422,500 On January 1, 2023, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by $62,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $226,900. Zeelan acquisition-date fair values for its current assets and liabilities were equal to their carrying amounts. Any remaining excess of Ze 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 Holland $ (722,400) Zeeland $ (435,500)

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 Property and equipment (net) Patents $ 14,700 Liabilities 208,700 Common stock 199,100 Retained earnings $422,500 $222,500 100,000 100,000 $422,500 On January 1, 2023, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by $62,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $226,900. Zeelan acquisition-date fair values for its current assets and liabilities were equal to their carrying amounts. Any remaining excess of Ze 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 Holland $ (722,400) Zeeland $ (435,500)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

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
Property and equipment (net)
Patents
$14,700 Liabilities
288,708 Common stock
199,100 Retained earnings
$422,500
$222,500
100,000
100,000
$ 422,500
On January 1, 2023, Holland assessed the carrying amount of Zeeland's equipment (5-year remaining life) to be undervalued by
$62,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $226,900. 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:
Sales
Account
Zeeland
Holland
$ (722,400)
366,300
$ (435,500)
203,500
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
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
90,500
14,700
54,800
(49,146)
$ (245,246)
$ (820,900)
(245,246)
50,000
$ (1,816,146)
$ 125,700
559,332
844,000
150,400
$1,679,432
$ (343,286)
(320,000)
В
(1,816,146)
$ (1,679,432)
At year-end, there were no intra-entity receivables or payables.
Required:
33,300
20,300
61,400
В
$ (117,000)
$ (315,400)
(117,000)
30,000
$ (482,480)
$ 88,500
В
266,000
154,500
$ 509,000
$ (6,680)
В
(100,000)
(482,480)
$ (509,000)
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
$
100,700
Controlling Interest
Noncontrolling
Interest
a2. Goodwill allocation
b. Initial Value
Amount
Show less A

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