The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for...

The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $7.70 per share on January 1, 2017. The remaining 20 percent of Devine’s shares also traded actively at $7.70 per share before and after Holtz’s acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devine’s underlying accounts except that a building with a 5-year future life was undervalued by $81,000 and a fully amortized trademark with an estimated 10-year remaining life had a $75,000 fair value. At the acquisition date, Devine reported common stock of $100,000 and a retained earnings balance of $290,000. Following are the separate financial statements for the year ending December 31, 2018: Holtz Corporation Devine, Inc. Sales $ (760,000 ) $ (365,250 ) Cost of goods sold 234,000 133,000 Operating expenses 319,000 107,250 Dividend income (16,000 ) 0 Net income $ (223,000 ) $ (125,000 ) Retained earnings, 1/1/18 $ (709,000 ) $ (360,000 ) Net income (above) (223,000 ) (125,000 ) Dividends declared 90,000 20,000 Retained earnings, 12/31/18 $ (842,000 ) $ (465,000 ) Current assets $ 166,000 $ 199,000 Investment in Devine, Inc 616,000 0 Buildings and equipment (net) 905,000 389,000 Trademarks 160,000 226,000 Total assets $ 1,847,000 $ 814,000 Liabilities $ (685,000 ) $ (249,000 ) Common stock (320,000 ) (100,000 ) Retained earnings, 12/31/18 (above) (842,000 ) (465,000 ) Total liabilities and equities $ (1,847,000 ) $ (814,000 ) At year-end, there were no intra-entity receivables or payables. Prepare a worksheet to consolidate these two companies as of December 31, 2018. Prepare a 2018 consolidated income statement for Holtz and Devine. If instead the noncontrolling interest shares of Devine had traded for $5.46 surrounding Holtz’s acquisition date, what is the impact on goodwill?

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for...

The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.90 per share on January 1, 2014. The remaining 20 percent of Devine’s shares also traded actively at $6.90 per share before and after Holtz’s acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devine’s underlying accounts except that a building with a 5-year life was undervalued by $52,500 and a fully amortized trademark with...

The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for...

The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.35 per share on January 1, 2017. The remaining 20 percent of Devine’s shares also traded actively at $6.35 per share before and after Holtz’s acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devine’s underlying accounts except that a building with a 5-year future life was undervalued by $78,500 and a fully amortized trademark...

The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for...

The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.45 per share on January 1, 2017. The remaining 20 percent of Devine’s shares also traded actively at $6.45 per share before and after Holtz’s acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devine’s underlying accounts except that a building with a 5-year future life was undervalued by $65,500 and a fully amortized trademark...

The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for...

The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.30 per share on January 1, 2017. The remaining 20 percent of Devine’s shares also traded actively at $6.30 per share before and after Holtz’s acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devine’s underlying accounts except that a building with a 5-year future life was undervalued by $45,000 and a fully amortized trademark...

The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for...

The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $7.15 per share on January 1, 2017. The remaining 20 percent of Devine’s shares also traded actively at $7.15 per share before and after Holtz’s acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devine’s underlying accounts except that a building with a 5-year future life was undervalued by $75,500 and a fully amortized trademark...

The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for...

The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.35 per share on January 1, 2014. The remaining 20 percent of Devine’s shares also traded actively at $6.35 per share before and after Holtz’s acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devine’s underlying accounts except that a building with a 5-year life was undervalued by $78,500 and a fully amortized trademark with...

The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for...

The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $7.30 per share on January 1, 2017. The remaining 20 percent of Devine’s shares also traded actively at $7.30 per share before and after Holtz’s acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devine’s underlying accounts except that a building with a 5-year future life was undervalued by $64,500 and a fully amortized trademark...

The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for...

The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $7.50 per share on January 1, 2017. The remaining 20 percent of Devine’s shares also traded actively at $7.50 per share before and after Holtz’s acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devine’s underlying accounts except that a building with a 5-year future life was undervalued by $46,500 and a fully amortized trademark...

The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for...

The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.70 per share on January 1, 2017. The remaining 20 percent of Devine’s shares also traded actively at $6.70 per share before and after Holtz’s acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devine’s underlying accounts except that a building with a 5-year future life was undervalued by $57,000 and a fully amortized trademark...

Subjects