Can please help mw with DTL calculation? for some reasons it is wrong.
Peace Corporation acquired 100 percent of Soft Inc. In a nontaxable transaction on December 31, 201. The following balance sheet Information is available Immediately following the transaction: Peace Corporation Soft Inc. Book Value Fair Values Book Value Fair Values Cash $ 34,060 34,090 $12,609 $12,809 Accounts Receivable, net 56, 060 56,060 14,090 14,060 Inventory 75,090 2,090 5,090 9.090 Deferred Tax Asset 10, 206 5,060 Investment in Soft 82,090 82,060 Equipment, net 165, 890 200, 606 34,606 46,506 Patent 23,606 Total Assets 3422,600 Accounts Payable $ 60,890 $ 60, 096 $10,090 Accrued Vacation Payable 14 20 $10,606 14,060 Deferred Tax Liability 5,090 3,006 Long-Term Debt 100, 206 8, 0GE Common Stock 125,060 9 , 096 Retained Earnings 128, 606 41, 209 Total Liabilities and Equity $422, 609 $71,606 Additional Information 1. The current and future effective tax rate for both Peace and Soft Is 40 percent. 2. The recorded deferred tax asset for Peace relates to the book-tax differences arising from the allowance for doubtful Accounts and the Accrued vacation payable. The expenses associated with each of these amounts will not be deductible for tax purposes until the related accounts receivable are written off or until the employee vacation is actually paid out. 3. The recorded deferred tax asset for Soft Is related solely to the book-tax difference arising from the allowance for doubtful accounts. 4. The recorded deferred tax liability In both Peace and Soft relates solely to the book-tax differences arising from the depreciation of their respective equipment. 5. Accumulated depreciation on the financial accounting records of Peace and Soft Is $46,000 and $18,000, respectively. 6. The Soft patent was Identified by Peace In the due diligence process and has not previously been recorded in the accounting records of Soft. 7. The book and tax bases of all other assets and liabilities of Peace and Soft are the same. Required: a. Compute the tax bases of the assets and liabilities for Peace and Soft, where different from the amounts recorded In the respective accounting records. Answer is complete and correct. Peace Tax Basis Soft Tax Basis Calculations Calculations Tax basis of accounts receivable 67.000 3 26.500 Tax basis of accrued vacation payable 0O Tax basis of equipment 152 500 5 26.500 Tax basis of patent b. Compute the fair value of the deferred tax assets and deferred tax liabilities for Soft. * Answer is complete but not entirely correct. DTA 6000 related Accounts Receivable DTL 20,000 6 related Inventory, Equipment, Patent O
