On January 1, 2018, Chester Inc.acquired 100% of Festus Corp.'s outstanding common stock by exchanging 37,500 shares of Chester's $2 par value common voting stock.On January 1, 2018, Chester's voting common stock had a fair value of $40 per share.Festus' voting common shares were selling for $6.50 per share.Festus' balances on the acquisition date, just prior to acquisition are listed below.
Required:
Compute the value of Goodwill on the date of acquisition, 1/1/18.

Question

On January 1, 2018, Chester Inc.acquired 100% of Festus Corp.'s outstanding common stock by exchanging 37,500 shares of Chester's $2 par value common voting stock.On January 1, 2018, Chester's voting common stock had a fair value of $40 per share.Festus' voting common shares were selling for $6.50 per share.Festus' balances on the acquisition date, just prior to acquisition are listed below.
  Required:
Compute the value of Goodwill on the date of acquisition, 1/1/18.

Quizplus · Accepted Answer

The Answer of On January 1, 2018, Chester Inc.acquired 100% of Festus Corp.'s outstanding common stock by exchanging 37,500 shares of Chester's $2 par value common voting stock.On January 1, 2018, Chester's voting common stock had a fair value of $40 per share.Festus' voting common shares were selling for $6.50 per share.Festus' balances on the acquisition date, just prior to acquisition are listed below.
  Required:
Compute the value of Goodwill on the date of acquisition, 1/1/18.