On January 1, Coldwater Company has a net book value of $1,639,000 as follows: 2,350 shares of preferred stock; par value $100 per share; cumulative, nonparticipating, nonvoting; call value $108 per share 21,000 shares of common stock; par value $40 per share Retained earnings Total 235,000 840,000 564,000 $ 1,639,000 $ Westmont Company acquires all outstanding preferred shares for $252,600 and 60 percent of the common stock for $898,080. The acquisition-date fair value of the noncontrolling interest in Coldwater's common stock was $598,720. Westmont believed that one of Coldwater's buildings, with a 12-year remaining life, was undervalued by $60,600 on the company's financial records. What amount of consolidated goodwill would be recognized from this acquisition?
On January 1, Coldwater Company has a net book value of $1,639,000 as follows: 2,350 shares of preferred stock; par value $100 per share; cumulative, nonparticipating, nonvoting; call value $108 per share 21,000 shares of common stock; par value $40 per share Retained earnings Total 235,000 840,000 564,000 $ 1,639,000 $ Westmont Company acquires all outstanding preferred shares for $252,600 and 60 percent of the common stock for $898,080. The acquisition-date fair value of the noncontrolling interest in Coldwater's common stock was $598,720. Westmont believed that one of Coldwater's buildings, with a 12-year remaining life, was undervalued by $60,600 on the company's financial records. What amount of consolidated goodwill would be recognized from this acquisition?
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter8: Investing Activities
Section: Chapter Questions
Problem 2CIC
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