Vibe Company Purchased the Net Assets of Atlantic Company in a Business

question 22

Multiple Choice

Vibe Company purchased the net assets of Atlantic Company in a business combination accounted 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 $210,000 on the date of the business combination.This asset had a net book value of $70,000.The building had an adjusted tax basis to Atlantic (and to Vibe as a result of the merger) of $120,000.Assuming a 40% income tax rate, at what amount should Vibe record this building on its books after the purchase?
$\begin{array}{lc} & \text { Deferred Tax } \\ \text { Building } & \text { Liability }\end{array}$

• A)?$174,000\(\quad \)\(\quad \)\(\quad \)\(\quad \) $ 0
• B)?$140,000 \(\quad \)\(\quad \)\(\quad \)\(\quad \)$36,000
• C)?$210,000 \(\quad \)\(\quad \)\(\quad \)\(\quad \)$90,000
• D)?$210,000 \(\quad \)\(\quad \)\(\quad \)\(\quad \)$36,000

Evaluate the financial performance of a company using budgetary data.

Understand the concepts of fixed and variable costs in budgeting.

Learn to calculate and interpret the planning budget.

Understand the flexible budget and its adjustments.

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Definitions:

Transistor

A semiconductor device used to amplify or switch electronic signals and electrical power, fundamental in modern electronic circuits.

V-Ref

Reference voltage. ECU or ECM conditioned voltage (usually 5 volts DC) supplied to various sensors (such as thermistors, potentiometers) in truck electronic circuits. In most cases, a portion of the voltage is returned to indicate the status of sensor.

Potentiometer

A three-terminal voltage divider. The terminals are identified as supply voltage, signal voltage, and ground. The position of the slider on the device resistive track determines how supply voltage is divided between the signal and ground paths.