Peace Corporation acquired 100 percent of Soft Inc in a nontaxable transaction on December 31, 20X1 The following balance sheet information is available immediately following the transaction Peace Corporation Book Value Fair Values $ 19,000 5. 39.000 $2,000 52.000 76,000 83,000 10,000 $1,000 81,000 180,000 215,000 Soft Inc Book Valu Fair Values $12.000 $12.00 17,000 17.00 3.000 2.000 25,000 41.500 29.000 Cash Accounts Receivable, net Inventory Deferred Tax Asset Investment in Soft Equipment, net Patent Total Assets Accounts Payable Accrued Vacation Payable Deferred Tax Liability Long-Term Debt Common Stock Retained Earnings Total Liabilities and Equity $ 60,000 11,000 567.000 $11,000 511,000 $438,000 $ 60,000 11,000 5,000 95,000 149.000 121,000 $435, eee 105,000 2 9,000 3,000 9,000 9.600 35.000 567.000 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-tox difference arising from the allowance for doubt 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 515,000, 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: Compute the tax bones of the assets and liabilities for Peace and Son, where different from the amounts recorded in the respective accounting records a Compute the tax bases of the assets and abilities for Peace and soft, where different from the amounts recorded in the respective accounting records Answer is complete but not entirely correct. Peace Tax Soft Tax Basis Calculations Calculations Tax basis of accounts receivable 72.500 22.000 Tax basis of accrued vacation payable 05 o Tax basis of equipment S 167 500 s 22.000 Tax basis of patent 3 0 b. Compute the fair value of the deferred tax assets and deferred tax liabilities for Soft. Answer is not complete. 6,000 Accounts Receivable Total DTA Total DTL related to related to Inventory, Equipment, Patent c. Prepare all of the consolidation entries needed to prepare the worksheet for Peace and Soft at the date tot in inurnal entry required" in the first account field.) c. Prepare all of the consolidation entries needed to prepare the worksheet for Peace and soft at the date of acquisition (if no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Event Accounts Debit Credit
