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 $5.50 per share both before and after the acquisition by Holland. Zeeland’s acquisition date balance sheet follows: Current assets $ 15,100 Liabilities $ 228,500 Property and equipment (net) 229,100 Common stock 100,000 Patents 204,300 Retained earnings 120,000 $ 448,500 $ 448,500 On January 1, 2020, Holland assessed the carrying amount of Zeeland’s equipment (5-year remaining life) to be undervalued by $66,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $254,600. 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: Holland Zeeland Sales $ (769,200 ) $ (439,500 ) Cost of goods sold 389,900 205,500 Depreciation expense 96,500 32,900 Amortization expense 15,100 19,900 Other operating expenses 56,400 60,200 Equity in Zeeland earnings (49,404 ) 0 Separate company net income $ (260,704 ) $ (121,000 ) Retained earnings 1/1 $ (821,300 ) $ (326,200 ) Net income (260,704 ) (121,000 ) Dividends declared 50,000 30,000 Retained earnings 12/31 $ (1,032,004 ) $ (417,200 ) Current assets $ 126,100 $ 92,500 Investment in Zeeland 551,928 0 Property and equipment (net) 848,000 270,000 Patents 151,200 158,500 Total assets $ 1,677,228 $ 521,000 Liabilities $ (325,224 ) $ (3,800 ) Common stock—Holland (320,000 ) 0 Common stock—Zeeland 0 (100,000 ) Retained earnings 12/31 (1,032,004 ) (417,200 ) Total liabilities and owners equity $ (1,677,228 ) $ (521,000 ) At year-end, there were no intra-entity receivables or payables. Compute the amount of goodwill recognized in Holland’s acquisition of Zeeland and the allocation of goodwill to the controlling and noncontrolling interest. Show how Holland determined its December 31, 2021, Investment in Zeeland account balance. 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. (Negative amounts should be shown with a minus sign.) Show less Amount a1. Goodwill $99,400 Controlling Interest NCI a2. Goodwill allocation $95,640 $3,760 Amount b. Investment in Zeeland 12/31/21 $420,000 Change in Zeeland’s RE 178,320 Excess amortization Investment in Zeeland $ Please help me calculate excess amortization

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 $5.50 per share both before and after the acquisition by Holland. Zeeland’s acquisition date balance sheet follows: Current assets $ 15,100 Liabilities $ 228,500 Property and equipment (net) 229,100 Common stock 100,000 Patents 204,300 Retained earnings 120,000 $ 448,500 $ 448,500 On January 1, 2020, Holland assessed the carrying amount of Zeeland’s equipment (5-year remaining life) to be undervalued by $66,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $254,600. 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: Holland Zeeland Sales $ (769,200 ) $ (439,500 ) Cost of goods sold 389,900 205,500 Depreciation expense 96,500 32,900 Amortization expense 15,100 19,900 Other operating expenses 56,400 60,200 Equity in Zeeland earnings (49,404 ) 0 Separate company net income $ (260,704 ) $ (121,000 ) Retained earnings 1/1 $ (821,300 ) $ (326,200 ) Net income (260,704 ) (121,000 ) Dividends declared 50,000 30,000 Retained earnings 12/31 $ (1,032,004 ) $ (417,200 ) Current assets $ 126,100 $ 92,500 Investment in Zeeland 551,928 0 Property and equipment (net) 848,000 270,000 Patents 151,200 158,500 Total assets $ 1,677,228 $ 521,000 Liabilities $ (325,224 ) $ (3,800 ) Common stock—Holland (320,000 ) 0 Common stock—Zeeland 0 (100,000 ) Retained earnings 12/31 (1,032,004 ) (417,200 ) Total liabilities and owners equity $ (1,677,228 ) $ (521,000 ) At year-end, there were no intra-entity receivables or payables. Compute the amount of goodwill recognized in Holland’s acquisition of Zeeland and the allocation of goodwill to the controlling and noncontrolling interest. Show how Holland determined its December 31, 2021, Investment in Zeeland account balance. 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. (Negative amounts should be shown with a minus sign.) Show less Amount a1. Goodwill $99,400 Controlling Interest NCI a2. Goodwill allocation $95,640 $3,760 Amount b. Investment in Zeeland 12/31/21 $420,000 Change in Zeeland’s RE 178,320 Excess amortization Investment in Zeeland $ Please help me calculate excess amortization

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 8MC

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Current assets	$	15,100	Liabilities	$	228,500
Property and equipment (net)		229,100	Common stock		100,000
Patents		204,300	Retained earnings		120,000
	$	448,500		$	448,500

On January 1, 2020, Holland assessed the carrying amount of Zeeland’s equipment (5-year remaining life) to be undervalued by $66,000. Holland also determined that Zeeland possessed unrecorded patents (10-year remaining life) worth $254,600. 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:

	Holland		Zeeland
Sales	$	(769,200	)	$	(439,500	)
Cost of goods sold		389,900			205,500
Depreciation expense		96,500			32,900
Amortization expense		15,100			19,900
Other operating expenses		56,400			60,200
Equity in Zeeland earnings		(49,404	)		0
Separate company net income	$	(260,704	)	$	(121,000	)

Retained earnings 1/1	$	(821,300	)	$	(326,200	)
Net income		(260,704	)		(121,000	)
Dividends declared		50,000			30,000
Retained earnings 12/31	$	(1,032,004	)	$	(417,200	)

Current assets	$	126,100		$	92,500
Investment in Zeeland		551,928			0
Property and equipment (net)		848,000			270,000
Patents		151,200			158,500
Total assets	$	1,677,228		$	521,000

Liabilities	$	(325,224	)	$	(3,800	)
Common stock—Holland		(320,000	)		0
Common stock—Zeeland		0			(100,000	)
Retained earnings 12/31		(1,032,004	)		(417,200	)
Total liabilities and owners equity	$	(1,677,228	)	$	(521,000	)

At year-end, there were no intra-entity receivables or payables.

Compute the amount of goodwill recognized in Holland’s acquisition of Zeeland and the allocation of goodwill to the controlling and noncontrolling interest.
Show how Holland determined its December 31, 2021, Investment in Zeeland account balance.
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. (Negative amounts should be shown with a minus sign.)

Show less

			Amount
a1.	Goodwill	$99,400
		Controlling Interest	NCI
a2.	Goodwill allocation	$95,640	$3,760
			Amount
b.	Investment in Zeeland 12/31/21	$420,000
	Change in Zeeland’s RE	178,320
	Excess amortization
	Investment in Zeeland	$

Please help me calculate excess amortization

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