Pine acquires 100% of Sol for 4,088,578 in a tax-free business combination. The applicable income...
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Accounting
Pine acquires 100% of Sol for 4,088,578 in a tax-free business combination. The applicable income tax rate is 30%. Goodwill is not deductible for tax purposes. Based on the following information about the assets and liabilities of Sunfish, what amount should Porpoise record as goodwill for this acquisition on the date of acquisition?
Old book basis
Old tax basis
Fair value
Cash
$400,000
$400,000
$400,000
Equipment, net of depreciation
500,000
200,000
750,000
Patents
0
0
2,000,000
Accounts payable
(300,000)
(300,000)
(300,000)
Deferred income taxes payable
(90,000)
NA
?
Notes payable
(200,000)
(200,000)
(230,000)
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