Solved: On January 1 2017 Holland Corporation paid 8 per

share

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:

On January 1, 2017, Holland assessed the carrying amount of Zeeland's equipment (5-year
remaining life) to be undervalued by $55,000. Holland also determined that Zeeland possessed
unrecorded patents (10-year remaining life) worth $285,000. 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, 2018, follow:

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 non-controlling 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?

On January 1 2017 Holland Corporation paid 8 per share

ANSWER
https://solvedquest.com/on-january-1-2017-holland-corporation-paid-8-per-share/

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