On July 1, 2009, Ute Corporation paid $900,000 for 90% of Cougar Company's outstanding common stock. On that date, the costs and fair values of Cougar's recorded assets and liabilities were as follows:
Cost Fair Value
Cash and Receivables 50,000 50,000
Inventory 230,000 300,000
Buildings and equipment (net) 200,000 350,000
Liabilities 80,000 120,000
Net assets 400,000 580,000
Give the information above, what is the portion of the purchase price that will be allocated to the differential?
a. $220,000
b. $400,000
c. $420,000
d. $240,000
Answers: 1
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On July 1, 2009, Ute Corporation paid $900,000 for 90% of Cougar Company's outstanding common stock....
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