Horse Corporation acquires all of Pony, Inc. for $300,000 cash. On that date, Pony has net assets with fair value of $250,000 but a book value and tax basis of $200,000. The tax rate is 40 percent. Prior to this date, neither Horse nor Pony has reported any deferred income tax assets or liabilities. Required: What amount of goodwill should be recognized on the date of the acquisition?
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Horse Corporation acquires all of Pony, Inc. Please solve these accounting problem
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- Bryer Co. purchases all of the assets and liabilities of Stellar Co. for $1,500,000. The fair value of Stellar’s assets is $2,000,000, and its liabilities have a fair value of $1,200,000. The book value of Stellar’s assets and liabilities are not known. For what amount would Bryer record goodwill associated with the purchase? a. $800,000.b. $500,000.c. $700,000.d. $0.Firm M exchanged an old asset with a $16,600 tax basis and a $39,000 FMV for a new asset worth $27,500 and $11,500 cash. Required: a. If the exchange is nontaxable, compute Firm M's realized and recognized gain and tax basis in the new asset. b. How would your answers change if the new asset were worth only $16,000, and Firm M received $23,000 cash in the exchange? Complete this question by entering your answers in the tabs below. Required A Required B If the exchange is nontaxable, compute Firm M's realized and recognized gain and tax basis in the new asset. Amount Realized gain Recognized gain Tax basisSunshine NFP, a not-for-profit entity, gains control over Dancing Bears NFP, another not-for-profit. The acquisition value of Dancing Bears is $2.3 million, but all of its identifiable assets and liabilities have a total fair value of only $2.1 million. What recording is made of the $200,000 difference?
- Business K exchanged an old asset (FMV $95,000) for a new asset (FMV $95,000). Business K's tax basis in the old asset was $113,000. Required: a. Compute Business K's realized loss, recognized loss, and tax basis in the new asset assuming the exchange was a taxable transaction. b. Compute Business K's realized loss, recognized loss, and tax basis in the new asset, assuming the exchange was a nontaxable transaction. c. Six months after the exchange, Business K sold the new asset for $103,000 cash. How much gain or loss does Business K recognize if the exchange was taxable? How much gain or loss if the exchange was nontaxable? Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute Business K's realized loss, recognized loss, and tax basis in the new asset assuming the exchange was a taxable transaction. Note: Losses should be indicated with a minus sign. Realized loss Recognized loss Tax basis AmountEaster Company’s 12/31/2021 statement of financial position reports assets of $5,000,000 and liabilities of $2,000,000. All of Easter’s assets’ book values approximate their fair value, except for land, which has a fair value that is $300,000 greater than its book value. On 12/31/2021, Wendell Corporation paid $5,100,000 to acquire Easter. Calculate the amount of goodwill Wendell should record as a result of this purchase.LiO Company transferred an old asset with a $13,600 adjusted tax basis in exchange for a new asset worth $11,000 and $1,500 cash. Which of the following statements are true? a) If the exchange is taxable, LiO recognizes an $1,100 loss. b) If the exchange is nontaxable, LiO recognizes no loss. c) If the exchange is nontaxable, LiO’s tax basis in the new asset is $12,100 d) If the exchange is nontaxable, LiO recognizes a $1,500 Loss
- Firm M exchanged an old asset with a $11, 500 tax basis and a $29, 000 FMV for a new asset worth $ 22,500 and $6,500 cash. Required: If the exchange is nontaxable, compute Firm M's realized and recognized gain and tax basis in the new asset. How would your answers change if the new asset were worth only $ 11,000, and Firm M received $18,000 cash in the exchange?Miller Corporation purchased Elvis Enterprises for $750,000 cash. The fair market value of Elvis's assets was $640,000, and the company had liabilities of $45,000. What amount of goodwill should Miller Corporation record related to the purchase of Elvis Enterprises?This year, Neil Incorporated exchanged a business asset for an investment asset. Both assets had a $932,000 appraised FMV. Neil’s book basis in the business asset was $604,600, and its tax basis was $573,000. Three years after the exchange, Neil sold the investment asset for $1,000,000 cash. Required: Compute Neil’s book gain and tax gain on sale assuming Neil acquired the investment asset in a taxable exchange. Compute Neil’s book gain and tax gain on sale assuming Neil acquired the investment asset in a nontaxable exchange.
- Heron Company purchases commercial realty on November 13, 2003, for $650,000. Straight-line depreciation of $287,492 is claimed before the property is sold on February 22, 2021, for $850,000. What are the tax consequences of the sale of realty if Heron is (a) a C corporation and (b) a sole proprietorship? a. If Heron is a C corporation, what is the amount of each type of gain recognized? If an amount is zero, enter "0". Round your answers to the nearest dollar. Character of Gain Ordinary income under § 1245 Ordinary income under § 1250 Ordinary income under § 291. § 1231 gain Total recognized gain 287,492 X § 1231 gain Total recognized gain 0 57,498 429,994 487,492 b. If Heron is a sole proprietorship, what is the amount of each type of gain recognized? Character of Gain Ordinary income under § 1245 Ordinary income under 5 1250 Ordinary income under § 291 0 0 0 487,492 487,492 ✓EB Corporation, a C corporation, purchases a warehouse on August 1, 2007, for $ 1 MILLION Straight-line depreciation is taken in the amount of $411, 750 before the property is sold on June 12, 2023, for $1.2 MIL. What is the amount and character of the gain recognized by EB on the sale of the realty?Aqua Corporation purchases nonresidential real property on May 8, 2020, for S1, 630, 000. Straight - line cost recovery is taken in the amount of $163, 000 before the property is sold on November 27, 2023, for S2, 445,000.a. Compute the amount of Aqua's recognized gain on the sale of the realty.b. Determine the amount of the recognized gain that is treated as § 1231 gain and the amount that is treated as § 1250 recapture (ordinary income due to § 291). § 1231 gain:§ 1250 recapture (ordinary income due to §