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									Soft Inc.
	Book Value				Fair Values					Book Value				Fair Values
Cash		$	38,000			$	38,000				$	15,000			$	15,000
Accounts Receivable, net			52,000				52,000					15,000				15,000
Inventory			77,000				84,000					7,000				11,000
Deferred Tax Asset			9,000									3,000				?
Investment in Soft			86,000				86,000
Equipment, net			180,000				215,000					32,000				45,000
Patent												0				23,000
Total Assets		$	442,000								$	72,000
Accounts Payable		$	53,000			$	53,000				$	14,000			$	14,000
Accrued Vacation Payable			13,000				13,000
Deferred Tax Liability			5,000									3,000				?
Long-Term Debt			110,000				120,000					9,000				9,000
Common Stock			140,000									10,000
Retained Earnings			121,000									36,000
Total Liabilities and Equity		$	442,000								$	72,000

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-tax difference arising from the allowance for doubtful 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 $41,000 and $14,000, 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:
a. Compute the tax bases of the assets and liabilities for Peace and Soft, where different from the amounts recorded in the respective accounting records.

b. Compute the fair value of the deferred tax assets and deferred tax liabilities for Soft.

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.)

d. Prepare the consolidation worksheet for Peace and Soft at the date of acquisition. (Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.)