On January 1, Morgan Company has a net book value of $1,460,000 as follows:
|
1,000 shares of preferred stock; par value $100 per share; cumulative, nonparticipating, nonvoting; call value $108 per share |
$ 100,000 |
|
20,000 shares of common stock; par value $40 per share |
800,000 |
|
Retained earnings |
560,000 |
|
Total |
$1,460,000 |
Leinen Company acquires all outstanding preferred shares for $106,000 and 60 percent of the common stock for $870,000. The acquisition date fair value of the noncontrolling interest in Morgan’s common stock was $580,000. Leinen believed that one of Morgan’s buildings, with a 12 year life, was undervalued by $50,000 on the company’s financial records. What amount of consolidated goodwill would be recognized from this acquisition?
a. $40,000.
b. $41,200.
c. $42,400.
d. $46,000.