Chapter 4, Problem 39P

The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $7.20 per share on January 1, 2020. The remaining 20 percent of Devine's shares also traded actively at $7.20 per share before and after Holtz's acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devine's underlying accounts except that a building with a five-year future life was undervalued by $85,500 and a fully amortized trademark with an estimated 10-year remaining life had a $64,000 fair value. At the acquisition date, Devine reported common stock of $100,000 and a retained earnings balance of $226,500. Following are the separate financial statements for the year ending December 31, 2021: Holtz Devine, Corporation $ Inc. (641,000) 198,000 273,000 $ (399,000) 176,000 126,000 Sales Cost of goods sold Operating expenses (16,000) ( 186,000) Dividend income $ (97,000) $ (296,500) (97,000) 20,000 $ (373,500) Net…

The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $7.15 per share on January 1, 2020. The remaining 20 percent of Devine's shares also traded actively at $7.15 per share before and after Holtz's acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devine's underlying accounts except that a building with a 5-year future life was undervalued by $75,500 and a fully amortized trademark with an estimated 10-year remaining life had a $63,000 fair value. At the acquisition date, Devine reported common stock of $100,000 and a retained earnings balance of $309,500. Following are the separate financial statements for the year ending December 31, 2021: Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/21 Net income (above) Dividends declared Retained earnings, 12/31/21 Current assets Investment in Devine, Inc. Buildings and equipment…

The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $7.35 per share on January 1, 2020. The remaining 20 percent of Devine’s shares also traded actively at $7.35 per share before and after Holtz’s acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devine’s underlying accounts except that a building with a 5-year future life was undervalued by $70,000 and a fully amortized trademark with an estimated 10-year remaining life had a $70,000 fair value. At the acquisition date, Devine reported common stock of $100,000 and a retained earnings balance of $264,000.   Following are the separate financial statements for the year ending December 31, 2021:     HoltzCorporation   Devine,Inc. Sales $ (741,000 )   $ (371,000 ) Cost of goods sold   218,000       173,000   Operating expenses   292,000       96,000   Dividend income   (16,000 )     0   Net income $ (247,000…