For Bob and Carl, the assets and liabilities and the effective income tax rates at December 31, 2001, follow:

Excess of Estimated EffecCurrent tive Amount of Estimated Values Income Estimated Current over Tax Tax Income Accounts Tax Bases Value Bases Rates Taxes Cash $ 20,000 $ 20,000 — — _________ Marketable securities 45,000 50,000 5,000 28% _________ Life insurance 50,000 50,000 — — _________ Residence 100,000 125,000 25,000 28% _________ Furnishings 40,000 25,000 (15,000) — _________ Jewelry 20,000 20,000 — — _________ Autos 20,000 12,000 (8,000) — _________ Mortgage payable (90,000) (90,000) — — _________ Note payable (30,000) (30,000) — — _________ Credit cards (10,000) (10,000) — — _________ Required

a. Compute the estimated tax liability on the differences between the estimated current value of the assets and liabilities and their tax bases.

b. Present a statement of financial condition for Bob and Carl at December 31, 2001.

c. Comment on the statement of financial condition.