Question

On January 1, Morgan Company has a net book value of $1,460,000 as follows:
1,000 shares of preferred stock; par value $100 per share; cumulative,
nonparticipating, nonvoting; call value $108 per share . . . . . . . . . $ 100,000
20,000 shares of common stock; par value $40 per share . . . . . . . . . 800,000
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 560,000
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,460,000
Leinen Company acquires all outstanding preferred shares for $106,000 and 60 percent of the common stock for $870,000. The acquisition-date fair value of the noncontrolling interest in Morgan’s common stock was $580,000. Leinen believed that one of Morgan’s buildings, with a 12-year life, was undervalued by $50,000 on the company’s financial records.
What amount of consolidated goodwill would be recognized from this acquisition?
a. $40,000.
b. $41,200.
c. $42,400.
d. $46,000.



$1.99
Sales0
Views117
Comments0
  • CreatedOctober 04, 2014
  • Files Included
Post your question
5000