Recognition of deferred taxes on the acquisition date (10 points) Assume that on January 1, 2018, an investor company acquired 100% of the outstanding voting common stock of an investee company in exchange for $320,000 in cash. The transaction is qualified as a non-taxable transaction under the Internal Revenue Code. The following financial statement information is for the investee company on January 1, 2018, prepared immediately before this transaction. Book Values Investee Current assets $90,000 Goodwill 20,000 Property 130,000 Total Assets $240,000 Current Liabilities $ 70,000 Noncurrent liabilities 65,000 Common Stock ($1 par) 95,000 Retained Earnings 10,000 Total Liabilities & Equity $240,000 Assume that the fair values of the investee's net assets approximated their recorded book values, except (1) the fair value of the investee's property is $160,000 and (2) the fair value of current liabilities is $80,000. In addition, the investee's pre-transaction tax bases of its assets and liabilities approximate their reported book values. Any differences between fair value and tax bases relate entirely to tax-deductible items. The tax rate for the investor and investee is 21%