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Branson paid $626,400 cash for all of the outstanding common stock of Wolfpack, Inc., on January 1, 2020. On that date, the subsidiary had a
Branson paid $626,400 cash for all of the outstanding common stock of Wolfpack, Inc., on January 1, 2020. On that date, the subsidiary had a book value of $428,000 (common stock of $200,000 and retained earnings of $228,000), although various unrecorded royalty agreements (10-year remaining life) were assessed at a $197,000 fair value. Any remaining excess fair value was considered goodwill. In negotiating the acquisition price, Branson also promised to pay Wolfpacks former owners an additional $58,000 if Wolfpacks income exceeded $170,000 total over the first two years after the acquisition. At the acquisition date, Branson estimated the probability-adjusted present value of this contingent consideration at $40,600. On December 31, 2020, based on Wolf
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