At what amount should vibe record this building

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Question

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, based on the use of accelerated depreciation for accounting purposes. The building had an adjusted tax basis to Atlantic (and to Vibe as a result of the merger) of $120,000.

Assuming a 36% income tax rate, at what amount should Vibe record this building on its books after the purchase?

Reference no: EM132319335

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