Reference no: EM133000679
On January 1, 2021, Lopez, Inc. acquired 100% of Mason Corp.'s outstanding common stock by exchanging 40,000 shares of Lopez's $1 par value common voting stock. On January 1, 2021, Lopez's voting common stock had a fair value of $42 per share. Mason's voting common shares were selling for $8.00 per share.
Mason's balances on the acquisition date, just prior to acquisition are listed below.
Book Value Fair Value
Cash $30,000 $30,000
Accounts Receivable 120,000 $120,000
Inventory 200,000 235,000
Land 230,000 280,000
Building (net) 450,000 590,000
Equipment (net) 175,000 150,000
Accounts Payable (80,000) (80,000)
Common Stock, $1 par (500,000)
Paid-in Capital (350,000)
Retained Earnings, 1/1/21 (275,000)
Required:
Problem 1: Compute the value of Goodwill resulting from the acquisition.
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