On January 1, 2013, Bast Co

question 32

Essay

On January 1, 2013, Bast Co. had a net book value of $2,100,000 as follows:
Fisher Co. acquired all of the outstanding preferred shares for $148,000 and 60% of the common stock for $1,281,000. Fisher believed that one of Bast's buildings, with a twelve-year life, was undervalued on the company's financial records by $70,000.
Required:
What is the amount of goodwill to be recognized from this purchase?

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Definitions:

Western Countries

Nations primarily located in the Western hemisphere, often characterized by democratic forms of government and capitalist economies.

Attribution

A concept in psychology referring to how people explain the causes of their own and others' behaviors and outcomes, often as internal dispositions or external situations.

Cognitive Dissonance

The mental discomfort experienced by a person who holds two or more contradictory beliefs, ideas, or values at the same time.

Fundamental Attribution Error

The fundamental attribution error is a bias in social psychology where individuals tend to attribute others' actions to their character or personality, while underestimating situational influences.