Answer:
Explanation:
a Consideration transferred by $540,000
Holland ($9.00 x 60,000 shares)
Fair value of the non-controlling 320,000
interest ($6.50 x 40,000 shares)
Total Zeeland fair value at January 1, 2017 $860,000
Zeeland book value at January 1, 2017 320,000
Excess acquisition-date fair over book value $540,000
To equipment (5-year remaining life) $50,000
To patent (10-year remaining life) 420,100 470,100
Goodwill $69,900
Goodwill allocation: Holland NCI
Acquisition-date fair value $540,000 $320,000
Share (60% and 40%) of identifiable * 474,060 316,040
net assets
Goodwill allocation $65,940 $3,960
*Zeeland identifiable net assets at acquisition-date fair value:
Current assets $15,700
Property and equipment ($329,700 + $50,000) 379,700
Patents ($212,100 + $420,100) 632,200
Liabilities (237,500)
Total fair value of net identifiable assets $790,100
b Investment in Zeeland
Initial value $540,000
Change in Zeeland’s RE × 60%
($439,400 – $220,000) × 60% 131,640
Excess amortization ($52,010 × 60% × 2 yrs.) (62,412)
Investment in Zeeland 12/31/18 609,228
HOLLAND CORPORATION AND ZEELAND CORPORATION
Consolidation Worksheet
For Year Ending December 31, 2018
Consolidation Entries Noncontrolling Consolidated
Accounts Holland Zeeland Debit Credit Interest Totals
Sales ($582,600) ($445,500) ($1,028,100)
Cost of 295,400 208,500 $503,900
goods sold
Depreciation 73,000 32,300 E 10000 115,300
expense
Amortization 15,700 19,300 E 42010 77,010
expense
Other operating 58,800 58,400 117,200
expenses
Equity in Zeeland -44,994 0 I 44994 0
earnings
Separate company ($184,694) ($127,000)
net income
Consolidated net income ($214,690)
Noncontrolling interest in CNI (29,996) 29,996
Controlling interest net income ($184,694)
Retained earnings ($821,900) ($342,400) S 342400 ($821,900)
, 1/1/18
Net income -184,694 -127,000 ($184,694)
Dividends declared 50,000 30,000 D 18000 12000 50000
Retained earnings, ($956,594) ($439,400) ($956,594)
12/31
Current assets $126,700 $98,500 $225,200
Investment in 609,228 0 D 18000 S 265,440
Zeeland, Inc
A1 250854
A2 65940
I 44994
Property and 854,000 276,000 A1 40000 E 10000 1,160,000
equipment (net)
Patents 152,400 168,500 A1 378090 E 42010 656,980
Goodwill 0 0 69900 69,900
Total assets $1,742,328 $543,000 $2,112,080
Liabilities -465,734 -3,600 -469,334
Common stock -320,000 -100,000 S 100000 -320000
Noncontrolling S 176960
interest
A1 167236
A2 3960 -348156 -366152
Retained earnings -956,594 -439,400 -956594
, 12/31
Total ($1,742,328) ($543,000) $1,045,394 $1,045,394 ($2,112,080)
liabilities and equities
