Hepner Corporation has the following stockholders' equity accounts: Preferred stock (5% cumulative dividend) Common stock Additional...

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Answer 1

Answer #1

Answer :

Goodwill = Acquisition Price - Book Value/FMV

Acquisition Price Calculation:

Acquisition Price for 70% of hepner corporations Common stock = $17,50,000

Acquisition Price for 60% of hepner corporations Preffered Stock = $8,10,000

Total Acquisition Price = $17,50,000 + $8,10,000 = $25,60,000

Book Value/fmv Calculation:

Preffered Stock = $5,40,000*60% = $3,24,000

Common Stock = $7,50,000*70% = $5,25,000

Book Value/FMV = $3,24,000+$5,25,000 = $8,49,000

Therefore Goodwill = $25,60,000 - $8,49,000 = $17,11,000

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Answer 2

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