On January 1, 2011, Chester Inc acquired 100 of Festus Corp 's outstanding common stock by exchanging 37,500 shares of Chester 's $2 par value common voting stock On January 1, 2011, Chester 's voting common stock had a fair value of $40 per share Festus voting common shares were selling for $6 50 ...

Purchase Consideration 37500 share 40 per share 1500000 ...

On January 1, 2011, Chester Inc. acquired 100% of Festus Corp.'s outstanding common stock by exchanging 37,500

Question:

On January 1, 2011, Chester Inc. acquired 100% of Festus Corp.'s outstanding common stock by exchanging 37,500 shares of Chester's $2 common voting stock. On January 1, 2011, Chester's voting common stock had a fair value of $40 per share. Festus voting common shares were selling for $6.50 per share. Festus' balances on the acquisition date, just prior to acquisition arc listed below.

Fair Value Book Value $ 30,000 Cash Accounts Receivable Inventory Land $ 120,000 230,000 120,000 200,000 230,000 450,000

Required
Compute the value of the Goodwill account on the date of acquisition, 1/1/11.

Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...