3. Purchase Accounting The Acquisition was accounted for as a purchase business combination in accordance with ASC 805, Business Combinations , whereby the purchase price paid to effect the Acquisition was allocated to recognize the acquired assets and liabilities at fair value. The sources and uses of funds in connection with the Transactions are summarized below: Sources: Proceeds from Term Loan $ 1,200,000 Proceeds from Notes 400,000 Proceeds from equity contributions 1,225,911 Cash on hand 307,150 Total sources $ 3,133,061 Uses: Equity purchase price $ 2,981,415 Transaction costs 151,646 Total uses $ 3,133,061 In connection with the purchase price allocation, fair values of long-lived and intangible assets were determined based upon assumptions related to the future cash flows, discount rates and asset lives utilizing currently available information, and in some cases, valuation results from independent valuation specialists. The allocation of purchase price is as follows: Purchase price $ 2,981,415 Less: net assets acquired (571,644 ) Less: after tax cost of post-combination share-based awards. (21,425 ) Excess of purchase price over book value of net assets acquired $ 2,388,346 Write up of tangible assets: Property and equipment $ 35,334 Merchandise inventories 32,500 Fair market value of favorable leases 61,010 Acquisition-related intangible assets: J.Crew brand name (indefinite lived) 885,300 Madewell brand name (20 year life) 82,000 Loyalty program and customer lists (5 year life) 27,010 Less: historical intangible assets (4,351 ) Acquisition-related intangibles 989,959 Write down/(up) of liabilities: Gift card liability revaluation 7,737 Deferred rent and lease incentive revaluation 66,880 Fair market value of unfavorable leases (40,920 ) Deferred income taxes: Long-term deferred tax asset (20,171 ) Short-term deferred tax liability (5,678 ) Long-term deferred tax liability (425,220 ) Residual goodwill(1) 1,686,915 Total allocated excess purchase price $ 2,388,346 (1) Residual goodwill consists primaril