Question
Porpoise acquires 100% of Sunfish in a taxable business combination. The applicable tax rate is 30%. Based on the following information about the assets and
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Porpoise acquires 100% of Sunfish in a taxable business combination. The applicable tax rate is 30%. Based on the following information about the assets and liabilities of Sunfish, what amount should Porpoise record as a deferred tax balance for this acquisition for purposes of consolidation on the date of acquisition? Enter a minus sign to denote a credit. (e.g. -200).
Old book basis Old tax basis Fair value Cash $200,000 $200,000 $200,000 Equipment, net of depreciation 1,000,000 500,000 750,000 Patents 0 0 2,730,748 Accounts payable (300,000) (300,000) (300,000) Deferred income taxes payable (150,000) NA ? Notes payable (200,000) (200,000) (230,000)
Porpoise acquires 100% of Sunfish in a taxable business combination. The applicable tax rate is 30%. Based on the following information about the assets and liabilities of Sunfish, what amount should Porpoise record as a deferred tax balance for this acquisition for purposes of consolidation on the date of acquisition? Enter a minus sign to denote a credit. (e.g. -200).
| Old book basis | Old tax basis | Fair value | |
| Cash | $200,000 | $200,000 | $200,000 |
| Equipment, net of depreciation | 1,000,000 | 500,000 | 750,000 |
| Patents | 0 | 0 | 2,730,748 |
| Accounts payable | (300,000) | (300,000) | (300,000) |
| Deferred income taxes payable | (150,000) | NA | ? |
| Notes payable | (200,000) | (200,000) | (230,000) |
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Coffee Plus Math Equal To Audit
Authors: Marina Peters
1st Edition
B08BDSDFR6, 979-8654153418
