On December 31, 20X6, Retail Ltd. purchased 100% of the outstanding shares of Supply Corporation by issuing Retail Ltd. shares worth $ 960,000 at current market prices. Supply Corporation was a supplier of merchandise to Retail Ltd.; Retail had purchased over 80% of Supply’s total output in 20X6. Supply had experienced declining profitability for many years, and in 20X4 began experiencing losses. By December 31, 20X6, Supply had accumulated tax-loss carry forwards amounting to $ 140,000. In contrast, Retail Ltd. was quite profitable, and analysts predicted that Retail’s positioning in the retail market was well suited to weather economic downturns without undue deterioration in profit levels.

The SFP for Supply Corporation at the date of acquisition is shown below, together with estimates of the fair values of Supply’s recorded assets and liabilities. In addition, Supply held exclusive Canadian rights to certain production processes; the fair value of these rights was estimated to be $ 200,000.

Required
Explain what values should be assigned to Supply Corporation's assets and liabilities when Retail Ltd. prepares its consolidated financial statements (including goodwill, if any).

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Supply Corporation Statement of Financial Position December 31, 20X6 Fair values Assets CURRENT ASSETS: Cash Accounts receivable (net) Inventories 20,000 40,000 210,000 20,000 40,000 200,000 270,000 PLANT, PROPERTY, AND EQUIPMENT Buildings Machinery and equipment Accumulated depreciation 600,000 500,000 (450,000) 650,000 200,000 00,000 370,000 Land 360,000 100,000 $1,220,000 110,000 Investments in shares TOTAL ASSETS Liabilities and shareholders' equity CURRENT LIABILITIES Accounts payable Unearned revenue Current portion of long-term debt 60,000 170,000 100,000 60,000 150,000 100,000 330,000 400,000 Bonds payable SHAREHOLDERS EQUITY 380,000 Common shares Retained earnings 150,000 340,000 490,000 $1,220,000 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY