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On January 1, 2023, Palo Verde Corporation acquired 100 percent of the voting stock of...

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Accounting

On January 1, 2023, Palo Verde Corporation acquired 100 percent of the voting stock of Silverstone Corporation in exchange for $2,030,000 in cash and securities. On the acquisition date, Silverstone had the following balance sheet: Cash $ 23,000 Accounts payable $ 1,050,000 Accounts receivable 97,000 Inventory 140,000 Equipment (net) 1,490,000 Common stock 800,000 Trademarks 850,000 Retained earnings 750,000 Total assets $ 2,600,000 Total liabilities and equity $ 2,600,000 At the acquisition date, the book values of Silverstones assets and liabilities were generally equivalent to their fair values except for the following assets: Asset Book Value Fair Value Remaining Useful Life Equipment $ 1,490,000 $ 1,610,000 8 years Royalty agreements 0 160,00

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