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Home / Questions / Show how Holland determined its December 31, 2018, Investment in Zeeland account balance.

Show how Holland determined its December 31, 2018, Investment in Zeeland account balance.

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.

Apr 26 2020 View more View Less

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