On January 1, 2018, Bast Co

question 87

Essay

On January 1, 2018, 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:

Turns Ratio

Turns ratio refers to the ratio of the number of windings in the primary coil to the number of windings in the secondary coil of a transformer, affecting voltage level.

Primary Voltage

The voltage at the primary winding of a transformer, which is transformed to a different voltage level at the transformer's secondary winding.

Secondary Voltage

The output voltage produced by the secondary winding of a transformer, which can be step-up or step-down relative to the primary voltage based on the turns ratio of the transformer.

Power Distribution System

A network of electrical components deployed to distribute and deliver power from the supply system to the consumer effectively.