Leftwich recently purchased all of Kew Corporation’s stock and is now consolidating the financial data of this new subsidiary. Leftwich paid a total of $650,000 for the company, which has the following accounts:
|
Fair Value |
Tax Basis |
|
|
Accounts receivable |
$110,000 |
$110,000 |
|
Inventory |
130,000 |
130,000 |
|
Land |
100,000 |
100,000 |
|
Buildings |
180,000 |
140,000 |
|
Equipment |
200,000 |
150,000 |
|
Liabilities |
220,000 |
220,000 |
Assume that the effective tax rate is 30 percent. On a consolidated balance sheet prepared immediately after this takeover, what impact does the acquisition of Kew have on the individual asset and liability accounts reported by the business combination?