Hepner Corporation has the following stockholders\' equity accounts Preferred st

Question

Hepner Corporation has the following stockholders' equity accounts Preferred stock (7% cumulative dividend) Common stock Additional paid-in capital Retained earnings $ 630,000 880,000 430,000 1,080,000 The preferred stock is participating. Wasatch Corporation buys 70 percent of this common stock for $1,750,000 and 60 percent of the preferred stock for $720,000. The acquisition-date fair value of the noncontrolling interest in the common shares was $750,000 and was $480,000 for the preferred shares. All of the subsidiary's assets and liabilities are iewed as having fair values equal ??ther book values. What amount is attributed to goodwill on the date of acquisition? Goodwill

Explanation / Answer

Goodwill $680,000

Explanation

onsideration transferred for common stock $1,750,000 Consideration transferred for preferred stock 720,000 Noncontrolling interest in common stock 750,000 Noncontrolling interest in preferred stock 480,000

Hepner’s acquisition-date fair value $3,700,000

Book value of Hepner 3,020,000

Goodwill $680,000

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