E 14-3 Acquisition date effects On January 1, 2016, Pai, a U.S. firm, purchases all the outstanding capital stock of Sta, a British firm, for $880,000, when the exchange rate for British pounds is $1.55. The book values of Sta's assets and liabilities are equal to fair values on this date, except for land that has a fair value of 200,000 and equipment with a fair value of 100,000. Summarized balance sheet information for Pai in U.S. dollars and for Sta in pounds just before the business com- bination is as follows: Pai Sta $3,000,000 100,000 Current assets Land 800,000 100,000 Buildings-net 1,200,000 250,000 Equipment-net 1,000,000 50,000 $6,000,000 500,000 Current liabilities. $600,000 50,000 1,000,000 150,000 Notes payable Capital stock 3,000,000 200,000 Retained earnings. 1,400,000 100,000 $6,000,000 500,000 REQUIRED: Prepare a consolidated balance sheet for Pai and Subsidiary at January 1, 2016, immediately after the business combination