The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.80 per share on January 1, 2020. The remaining 20 percent of Devines shares also traded actively at $6.80 per share before and after Holtzs acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devines underlying accounts except that a building with a 5-year future life was undervalued by $84,000 and a fully amortized trademark with an estimated 10-year remaining life had a $81,000 fair value. At the acquisition date, Devine reported common stock of $100,000 and a retained earnings balance of $254,000. Following are the separate financial statements for the year ending December 31, 2021: Holtz Corporation Devine, Inc. Sales $ (751,000 ) $ (409,250 ) Cost of goods sold 249,000 177,000 Operating expenses 287,000 128,250 Dividend income (16,000 ) 0 Net income $ (231,000 ) $ (104,000 ) Retained earnings, 1/1/21 $ (753,000 ) $ (324,000 ) Net income (above) (231,000 ) (104,000 ) Dividends declared 80,000 20,000 Retained earnings, 12/31/21 $ (904,000 ) $ (408,000 ) Current assets $ 147,000 $ 186,000 Investment in Devine, Inc. 544,000 0 Buildings and equipment (net) 900,000 405,000 Trademarks 147,000 145,000 Total assets $ 1,738,000 $ 736,000 Liabilities $ (514,000 ) $ (228,000 ) Common stock (320,000 ) (100,000 ) Retained earnings, 12/31/21 (above) (904,000 ) (408,000 ) Total liabilities and equities $ (1,738,000 ) $ (736,000 ) At year-end, there were no intra-entity receivables or payables. Prepare a worksheet to consolidate these two companies as of December 31, 2021. Prepare a 2021 consolidated income statement for Holtz and Devine. If instead the noncontrolling interest shares of Devine had traded for $5.19 surrounding Holtzs acquisition date, what is the impact on goodwill?.

1. The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine,
Inc., for $6.80 per share on January 1, 2020. The remaining 20 percent of Devines shares also
traded actively at $6.80 per share before and after Holtzs acquisition. An appraisal made on that
date determined that all book values appropriately reflected the fair values of Devines underlying
accounts except that a building with a 5-year future life was undervalued by $84,000 and a fully
amortized trademark with an estimated 10-year remaining life had a $81,000 fair value. At the
acquisition date, Devine reported common stock of $100,000 and a retained earnings balance of
$254,000. Following are the separate financial statements for the year ending December 31,
2021: Holtz Corporation Devine, Inc. Sales $ (751,000 ) $ (409,250 ) Cost of goods sold 249,000
177,000 Operating expenses 287,000 128,250 Dividend income (16,000 ) 0 Net income $
(231,000 ) $ (104,000 ) Retained earnings, 1/1/21 $ (753,000 ) $ (324,000 ) Net income (above)
(231,000 ) (104,000 ) Dividends declared 80,000 20,000 Retained earnings, 12/31/21 $ (904,000
) $ (408,000 ) Current assets $ 147,000 $ 186,000 Investment in Devine, Inc. 544,000 0
Buildings and equipment (net) 900,000 405,000 Trademarks 147,000 145,000 Total assets $
1,738,000 $ 736,000 Liabilities $ (514,000 ) $ (228,000 ) Common stock (320,000 ) (100,000 )
Retained earnings, 12/31/21 (above) (904,000 ) (408,000 ) Total liabilities and equities $
(1,738,000 ) $ (736,000 ) At year-end, there were no intra-entity receivables or payables. Prepare
a worksheet to consolidate these two companies as of December 31, 2021. Prepare a 2021
consolidated income statement for Holtz and Devine. If instead the noncontrolling interest shares
of Devine had traded for $5.19 surrounding Holtzs acquisition date, what is the impact on
goodwill?