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On January 1, 2020, Prestige Corporation acquired 100 percent of the voting stock of Stylene Corporation in exchange for $2,227,500 in cash and securities.
On January 1, 2020, Prestige Corporation acquired 100 percent of the voting stock of Stylene Corporation in exchange for $2,227,500 in cash and securities. On the acquisition date, Stylene had the following balance sheet: Cash $ 31,200 Accounts payable $ 1,246,700 Accounts receivable 143,500 Inventory Equipment (net) Trademarks 182,000 1,560,000 964,000 Common stock Retained earnings 800,000 834,000 Total assets $ 2,880,700 Total liabilities and equity $ 2,880,700 At the acquisition date, the book values of Stylene's assets and liabilities were generally equivalent to their fair values except for the following assets: Asset Book Value Fair Value Equipment Customer lists $ 1,560,000 Trademarks 964,000 $ 1,690,000 214,000 1,026,500 Remaining Useful Life 8 years 4 years indefinite During the next two years, Stylene has the following income and dividends in its own separately prepared financial reports to its parent.
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