On January 1, 2017, Apex Solutions Paid $200,000 to Acquire

question 164

Essay

On January 1, 2017, Apex Solutions paid $200,000 to acquire Fancy Phones, Inc., an electronic gadget-advertising website. At the time of the acquisition, Fancy Phones' balance sheet reported total assets of $200,000 and liabilities of $100,000. The fair market value of Fancy Phones' assets was $200,000. The fair market value of its liabilities was $100,000. At the end of 2020, goodwill was measured, and its fair value was determined to be $60,000. Record the impairment of goodwill. Omit explanation.

---

Definitions:

Labor Supply

The total amount of hours employees are ready and capable of working for a specified rate of pay.

Payroll Tax

A tax imposed on employers or employees, and is typically calculated as a percentage of the salaries that employers pay their staff.

Tax Shifting

The process whereby the economic burden of a tax is passed on from one group to another.

Income Tax

A tax levied by governments on individuals or entities based on their income or profits, varying according to earnings levels.