On January 1, Tesco Company spent a total of $4,384,000 to acquire control over Blondel Company. This price was based on paying $424,000 for 20 percent of Blondel’s preferred stock and $3,960,000 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 $440,000. The fair value of the 80 percent of Blondel’s preferred shares not owned by Tesco was $1,696,000. Blondel’s stock-holders’ equity accounts at January 1 were as follows:Preferred stock—9%, $100 par value, cumulative and participating; 10,000 shares outstanding ...... $ 1,000,000Common stock—$50 par value; 40,000 shares outstanding . . 2,000,000Retained earnings . . . . . 3,000,000Total stockholders’ equity . $ 6,000,000 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? Choose the correct.a. $ 300,000b. $ 316,000c. $ 364,000d. $ 520,000
On January 1, Tesco Company spent a total of $4,384,000 to acquire control over Blondel Company. This price was based on paying $424,000 for 20 percent of Blondel’s preferred stock and $3,960,000 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 $440,000. The fair value of
the 80 percent of Blondel’s
holders’ 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 . . . . . 3,000,000
Total
Tesco believes that all of Blondel’s accounts approximate their fair values within the company’s financial statements. What amount of consolidated
a. $ 300,000
b. $ 316,000
c. $ 364,000
d. $ 520,000
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