B1. Vibe Company purchased the net assets of Atlantic Company in a business combination occounted for as a purchase. As a result, goodwill was recorded. For tax purposes, this combination was considered to be a tax-free merger. Included in the assets is a building with an appraised value of P210,000 on the date of the business combination. This asset had a opue of P70.000, based on the use of accelerated depreciation for accounting purposes. The building had an adjusted tax basis to Atlantic (and to Vibe as a result of the Pod of P120,000. Assuming a 36% income tax rate, at what amount should Vibe record nis building on its books after the purchase? a P120,000 P134,400 C. P140,000 d. P210,000

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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combination was considered to be a tax-free merger. Included in the assets is a building with
an appraised value of P210,000 on the date of the business combination. This asset had a
oook yolue of P70,000, based on the use of accelerated depreciation for accounting
enoses, The building had an adjusted tax basis to Atlantic (and to Vibe as a result of the
Pu of P120,000. Assuming a 36% income tax rate, at what amount should Vibe record
his building on its books after the purchase?
a. P120,000
b. P134,400
C.
P140,000
d.
P210,000
Transcribed Image Text:combination was considered to be a tax-free merger. Included in the assets is a building with an appraised value of P210,000 on the date of the business combination. This asset had a oook yolue of P70,000, based on the use of accelerated depreciation for accounting enoses, The building had an adjusted tax basis to Atlantic (and to Vibe as a result of the Pu of P120,000. Assuming a 36% income tax rate, at what amount should Vibe record his building on its books after the purchase? a. P120,000 b. P134,400 C. P140,000 d. P210,000
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