# Question

On January 1, Tesco Company spent a total of \$4,384,000 to acquire control over Blondel Company. This price was based on paying \$424,000 for 20 percent of Blondel’s preferred stock and \$3,960,000 for 90 percent of its outstanding common stock. At the acquisition date, the fair value of the 10 percent noncontrolling interest in Blondel’s common stock was \$440,000. The fair value of the 80 percent of Blondel’s preferred shares not owned by Tesco was \$1,696,000. Blondel’s stockholders’ equity accounts at January 1 were as follows:
Preferred stock—9%, \$100 par value, cumulative and participating;
10,000 shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \$1,000,000
Common stock—\$50 par value; 40,000 shares outstanding . . . . . . . 2,000,000
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \$6,000,000

Tesco believes that all of Blondel’s accounts approximate their fair values within the company’s financial statements. What amount of consolidated goodwill should be recognized?
a. \$300,000.
b. \$316,000.
c. \$364,000.
d. \$520,000.

Sales0
Views229