Skipen Corp. had the following stockholders' equity accounts:
The preferred stock was participating and is therefore considered to be equity. Vestin Corp. acquired 90% of this common stock for $2,250,000 and 70% of the preferred stock for $1,120,000. All of the subsidiary's assets and liabilities were determined to have fair values equal to their book values except for land which is undervalued by $130,000.
Required:
What amount was attributed to goodwill on the date of acquisition?

Question

Skipen Corp. had the following stockholders' equity accounts:  
The preferred stock was participating and is therefore considered to be equity. Vestin Corp. acquired 90% of this common stock for $2,250,000 and 70% of the preferred stock for $1,120,000. All of the subsidiary's assets and liabilities were determined to have fair values equal to their book values except for land which is undervalued by $130,000.
Required:
What amount was attributed to goodwill on the date of acquisition?

Quizplus · Accepted Answer

The Answer of Skipen Corp. had the following stockholders' equity accounts:  
The preferred stock was participating and is therefore considered to be equity. Vestin Corp. acquired 90% of this common stock for $2,250,000 and 70% of the preferred stock for $1,120,000. All of the subsidiary's assets and liabilities were determined to have fair values equal to their book values except for land which is undervalued by $130,000.
Required:
What amount was attributed to goodwill on the date of acquisition?