Question

Porpoise acquires 100% of Sunfish in a tax-free business combination. The applicable income 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	3,042,425
Accounts payable	(300,000)	(300,000)	(300,000)
Deferred income taxes payable	(150,000)	NA	?
Notes payable	(200,000)	(200,000)	(230,000)

Answer 1

ANSWER:-

THANK YOU, if any queries please leave your valuable comment on comment box.....