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During 2021, Blossom Company purchased the net assets of Crane Corporation for $2226400. On the date of the transaction, Crane had $607200 of liabilities. The
During 2021, Blossom Company purchased the net assets of Crane Corporation for $2226400. On the date of the transaction, Crane had $607200 of liabilities. The fair value of Crane's assets when acquired were as follows: Current assets $1092960 Noncurrent assets 2550240 $3643200 How should the $809600 difference between the fair value of the net assets acquired ($3036000) and the cost ($2226400) be accounted for by Blossom? The current assets should be recorded at $1092960 and the noncurrent assets should be recorded at $1740640. O A deferred credit of $809600 should be set up and then amortized to income over a period not to exceed forty years. The $809600 difference should be recognized as a gain. The $809600 difference should be credited to retained earnings
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