The companies' financial statements for the year ending December 31, 2018, follow: Holland S Zeeland (430,500) 201,000 33,800 20,800 62,900 Sales (663,900) 336,800 83,000 14,200 Cost of goods sold Depreciation expense Amortization expense other operating expenses 52,800 Equity in Zeeland earnings (42,636) C S (219,736) (112,000) Separate company net incone Retained earnings 1/1 Net income (820,400) (219,736) 50,000 (301,900) (112,000) 30,000 Dividends declared (990,136) (383,900) Retained earnings 12/31 S Current assets 125,200 589,212 839,000 149,400 83,500 Investment in Zeelandi Property and equipment (net) Patents 261,000 149,500 1,702,812 494,000 Total assets $ (10,100) Liabilities Common stock- lol1and Common atoek Zeeland Retained earnings 12/31 (392,676) (320,000) C (100,000) (383,900) $ (494,000) (990,136) Total liabilities and owners equity $(1,702,812) At year-end, there were no intra-entity receivables or payables. 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, 2018, Investment in Zeeland account balance. c. Prepare a worksheet to determine the amounts that should appear on Holland's December 31, 2018, consolidated financial statements
Req A and B Req C 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, 2018, Investment in Zeeland account balance. Amount Goodwill S 187,600 a1 Controlling Interest NCI Goodwill allocation a2. Amount Investment in Zeeland 12/31/18
Noncontrolling Consolidation Entries Consolidated Totals Accounts Holland Zeeland Debit Credit Interest (663,900) (430,500) Sales Cost of goods sold 336,800 201,000 Depreciation expense 83,000 33,800 Amortization expense 14,200 20,800 Other operating expenses 52,800 62,900 Equity in Zeeland earnings (42,636) 0 Separate company net income Consolidated net income Noncontrolling interest in CN (219,736) $(112,000) Controlling interest net income Retained earnings, 1/1/18 $ (301,900) (820,400) Net income (219,736) (112,000) Dividends declared 30,000 50,000 Retained earnings, 12/31 (990,136) $ (383,900) 125,200 Current assets 83,500 Investment in Zeeland, Inc 589,212 Property and equipment (net) 839,000 261,000 Patents 149,400 149,500 Goodwill $1,702,812 $ Total assets 0 494,000 Liabilities (392,676) (10,100) Common stock (320,000) (100,000) Noncontrolling interest Retained earnings, 12/31 Total liabilities and equities (383,900) (990,136) S 0 0 0 (1,702,812) (494,000)
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On January 1, 2017, Holland Corporation paid $9 per share to a group of Zeeland Corporation...
On January 1, 2020, Holland Corporation paid $9 per share to a group of Zeeland Corporation...
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 15,70 329,700 212,100 557,500...
On January 1, 2020, Holland Corporation paid $8 per share to a group of Zeeland Corporation...
On January 1, 2020, 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 $6.00 per share both before and after the acquisition by Holland. Zeeland's acquisition date balance sheet follows: Current assets Property and equipment (net) Patents $ 16,300 250, 300 219,900 $...
On January 1, 2017, Holland Corporatlon pald $9 per share to a group of Zeeland Corporation shareholders to acquire 60,...
On January 1, 2017, Holland Corporatlon pald $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 remalning 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 acquisitlon date balance sheet follows: 236, 000 $ 15, 600 Liabilities Common stock Current assets Property and equipment...
On January 1, 2020, Holland Corporation paid $8 per share to a group of Zeeland Corporation...
On January 1, 2020, 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
$6.00 per share both before and after the acquisition by Holland.
Zeeland’s acquisition date balance sheet follows:
Current assets
$
16,300
Liabilities
$
246,500
Property and equipment (net)
250,300
Common...
On January 1, 2020, Holland Corporation paid $7 per share to a group of Zeeland Corporation...
On January 1, 2020, 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
$6.00 per share both before and after the acquisition by Holland.
Zeeland’s acquisition date balance sheet follows:
Current assets
$
15,200
Liabilities
$
230,000
Property and equipment (net)
249,200
Common...
On January 1, 2017, Holland Corporation paid $8 per share to a group of Zeeland Corporation...
On January 1, 2017, 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: Current assets $ 14,900 Liabilities $ 225,500 Property and equipment (net) 288,900 Common...
On January 1, 2017, Holland Corporation paid $8 per share to a group of Zeeland Corporation...
On January 1, 2017, 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 $6.50 per share both before and after the acquisition by Holland. Zeeland’s acquisition date balance sheet follows: Current assets $ 14,000 Liabilities $ 212,000 Property and equipment (net) 268,000 Common...
On January 1, 2017, Mcllroy, Inc., acquired a 60 percent interest in the common stock of...
On January 1, 2017, Mcllroy, Inc., acquired a 60 percent interest in the common stock of Stinson, Inc., for $334,200. Stinson's book value on that date consisted of common stock of $100,000 and retained earnings of $197,600. Also, the acquisition date fair value of the 40 percent noncontrolling interest was $222,800. The subsidiary held patents (with a 10-year remaining life) that were undervalued within the company's accounting records by $75,700 and an unrecorded customer list (15-year remaining life) assessed at...
On January 1, 2017, Mcllroy, Inc., acquired a 60 percent interest in the common stock of...
On January 1, 2017, Mcllroy, Inc., acquired a 60 percent interest in the common stock of Stinson, Inc., for $392,400. Stinson's book value on that date consisted of common stock of $100,000 and retained earnings of $231,900. Also, the acquisition-date fair value of the 40 percent noncontrolling interest was $261,600. The subsidiary held patents (with a 10-year remaining life) that were undervalued within the company's accounting records by $81,700 and an unrecorded customer list (15-year remaining life) assessed at a...
Consolidation Eliminations Several Years after Acquisition Paramount Corporation acquired its 75 percent investment in Sun Corporation...
Consolidation Eliminations Several Years after Acquisition Paramount Corporation acquired its 75 percent investment in Sun Corporation in January 2012 for $3,492.000 and accounts for its investment internally using the complete equity method. At the acquisition date, total book value of Sun was $1,800,000 including $960,000 of retained earnings, and the estimated fair value of the 25 percent noncontrolling interest was $948,000. The fair values of Sun's assets and liabilities were equal to their carrying values, except for the following items:...
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 15,70 329,700 212,100 557,500...
On January 1, 2020, 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 $6.00 per share both before and after the acquisition by Holland. Zeeland's acquisition date balance sheet follows: Current assets Property and equipment (net) Patents $ 16,300 250, 300 219,900 $...
On January 1, 2017, Holland Corporatlon pald $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 remalning 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 acquisitlon date balance sheet follows: 236, 000 $ 15, 600 Liabilities Common stock Current assets Property and equipment...
On January 1, 2020, 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
$6.00 per share both before and after the acquisition by Holland.
Zeeland’s acquisition date balance sheet follows:
Current assets
$
16,300
Liabilities
$
246,500
Property and equipment (net)
250,300
Common...
On January 1, 2020, 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
$6.00 per share both before and after the acquisition by Holland.
Zeeland’s acquisition date balance sheet follows:
Current assets
$
15,200
Liabilities
$
230,000
Property and equipment (net)
249,200
Common...
On January 1, 2017, Mcllroy, Inc., acquired a 60 percent interest in the common stock of Stinson, Inc., for $334,200. Stinson's book value on that date consisted of common stock of $100,000 and retained earnings of $197,600. Also, the acquisition date fair value of the 40 percent noncontrolling interest was $222,800. The subsidiary held patents (with a 10-year remaining life) that were undervalued within the company's accounting records by $75,700 and an unrecorded customer list (15-year remaining life) assessed at...
On January 1, 2017, Mcllroy, Inc., acquired a 60 percent interest in the common stock of Stinson, Inc., for $392,400. Stinson's book value on that date consisted of common stock of $100,000 and retained earnings of $231,900. Also, the acquisition-date fair value of the 40 percent noncontrolling interest was $261,600. The subsidiary held patents (with a 10-year remaining life) that were undervalued within the company's accounting records by $81,700 and an unrecorded customer list (15-year remaining life) assessed at a...
Consolidation Eliminations Several Years after Acquisition Paramount Corporation acquired its 75 percent investment in Sun Corporation in January 2012 for $3,492.000 and accounts for its investment internally using the complete equity method. At the acquisition date, total book value of Sun was $1,800,000 including $960,000 of retained earnings, and the estimated fair value of the 25 percent noncontrolling interest was $948,000. The fair values of Sun's assets and liabilities were equal to their carrying values, except for the following items:...
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