On January 1,2011,Bast Co Fisher Coacquired All of the Outstanding Preferred Shares for $148,000 and as Follows

question 16

Essay

On January 1,2011,Bast Co.had a net book value of $2,100,000 as follows: $$\begin{array} { | l | c | } \hline \begin{array} { l } \text { Preferred stock, } 2,000 \text { shares } \$ 70 \text { par value, } \\\text { cumulative, nonparticipating, nonvoting }\end{array} & \$ 140,000 \\\hline \text { Common stock, } 22,400 \text { shares } \$ 50 \text { par value } & 1,120,000 \\\hline \text { Retained earnings } & \underline { 840,000 } \\\hline \text { Total shareholders' equity } &\underline{\underline{\$ 2.100,000 }} \\\hline & \\\hline\end{array}$$
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:

Consolidation Worksheet

A tool used in the preparation of consolidated financial statements that helps in adjusting and combining the financial information of parent and subsidiary entities.

Purpose

The objective or intended outcome that an organization or plan is meant to achieve.

In-process Research and Development

The value of research and development efforts acquired through an acquisition that have not yet reached commercial viability.

Business Combination

A transaction or event in which an acquirer obtains control of one or more businesses.