On January 1, Coldwater Company has a net book value of $2,174,000 as follows:
2,000 shares of preferred stock; par value $100 per share;
Cumulative, no participating, nonvoting;
call value $108 per share .............................................................. $ 200,000
34,500 shares of common stock; par value $40 per share .......... 1,380,000
Retained earnings........................................................................ 594,000
Total.............................................................................................$ 2,174,000
Westmont Company acquires all outstanding preferred shares for $214,000 and 60 percent of the common stock for $1,253,280. The acquisition-date fair value of the non controlling interest in Cold water’s common stock was $835,520. Westmont believed that one of Cold water’s buildings, with a 12-year remaining life, was undervalued by $63,600 on the company’s financial records.
What amount of consolidated goodwill would be recognized from this acquisition?
a. $61,600.
b. $65,200.
c. $60,400.
d. $59,200.