During 2021, Carla Vista Company purchased the net assets of Sandhill Corporation for $2219800. On the date of the transaction, Sandhill had $605400 of liabilities. The fair value of Sandhill's assets when acquired were as follows: Current assets $1089720 Noncurrent assets 2542680 $3632400 How should the $807200 difference between the fair value of the net assets acquired ($3027000) and the cost ($2219800) be accounted for by Carla Vista?
During 2021, Carla Vista Company purchased the net assets of Sandhill Corporation for $2219800. On the date of the transaction, Sandhill had $605400 of liabilities. The fair value of Sandhill's assets when acquired were as follows: Current assets $1089720 Noncurrent assets 2542680 $3632400 How should the $807200 difference between the fair value of the net assets acquired ($3027000) and the cost ($2219800) be accounted for by Carla Vista?
Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization
Section: Chapter Questions
Problem 60P
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During 2021, Carla Vista Company purchased the net assets of Sandhill Corporation for $2219800. On the date of the transaction, Sandhill had $605400 of liabilities. The fair value of Sandhill's assets when acquired were as follows:
| Current assets | $1089720 |
| Noncurrent assets | 2542680 |
| $3632400 |
How should the $807200 difference between the fair value of the net assets acquired ($3027000) and the cost ($2219800) be accounted for by Carla Vista?
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