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On January 1 2017 Holland Corporation Paid 8 Per Share

Holland Corporation acquired 60,000 shares of Zeeland Corporation for $8 per share on January 1, 2017, representing a 60% ownership interest. Holland assessed Zeeland's equipment to be undervalued by $55,000 and determined Zeeland possessed unrecorded patents worth $285,000. Any remaining excess value was attributed to goodwill. The financial statements of both companies as of December 31, 2018 are provided to determine the goodwill allocation and Holland's investment in Zeeland balance on the consolidated statements.

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185 views1 page

On January 1 2017 Holland Corporation Paid 8 Per Share

Holland Corporation acquired 60,000 shares of Zeeland Corporation for $8 per share on January 1, 2017, representing a 60% ownership interest. Holland assessed Zeeland's equipment to be undervalued by $55,000 and determined Zeeland possessed unrecorded patents worth $285,000. Any remaining excess value was attributed to goodwill. The financial statements of both companies as of December 31, 2018 are provided to determine the goodwill allocation and Holland's investment in Zeeland balance on the consolidated statements.

Uploaded by

Amit Pandey
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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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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