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$1089720Noncurrent assets 2542680 $3632400How should the $807200 difference between the fair value of the net assets acquired ($3027000) and the cost ($2219800) be accounted for by Carla Vista?

The fair market value of an asset implies the present cost of an asset in the market. Fair value can…

Answered: During 2021, Carla Vista Company…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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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