On January 1, Tesco Company spent a total of $4,428,000 to acquire control over Blondel Company. This price was based on paying $432,000 for 20 percent of Blondel’s preferred stock and $3,996,000 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 $444,000. The fair value of the 80 percent of Blondel’s preferred shares not owned by Tesco was $1,728,000. 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 3,350,000 Total stockholders’ equity $ 6,350,000 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?
On January 1, Tesco Company spent a total of $4,428,000 to acquire control over Blondel Company. This price was based on paying $432,000 for 20 percent of Blondel’s preferred stock and $3,996,000 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 $444,000. The fair value of the 80 percent of Blondel’s preferred shares not owned by Tesco was $1,728,000. 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 3,350,000 Total stockholders’ equity $ 6,350,000 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?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter12: Intangibles
Section: Chapter Questions
Problem 18E
Related questions
Question
On January 1, Tesco Company spent a total of $4,428,000 to acquire control over Blondel Company. This price was based on paying $432,000 for 20 percent of Blondel’s preferred stock and $3,996,000 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 $444,000. The fair value of the 80 percent of Blondel’s
| 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 |
| 3,350,000 | |
| Total stockholders’ equity | $ 6,350,000 |
Tesco believes that all of Blondel’s accounts approximate their fair values within the company’s financial statements. What amount of consolidated
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning