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On December 31, Year 5, Darrell Inc. purchased 100% of the outstanding shares of Kindersley...

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Accounting

On December 31, Year 5, Darrell Inc. purchased 100% of the outstanding shares of Kindersley Company for $7,500 cash. Three different values for Kindersley's balance sheet accounts on the date of acquisition were as follows: Carrying Amount Tax Base Fair Value Monetary assets $ 1,600 $ 1,600 $ 1,600 Inventory 3,660 3,660 3,160 Patent (net) 4,500 3,500 5,300 $ 9,760 $ 8,760 $ 10,060 Monetary liabilities $ 3,000 $ 3,000 $ 3,000 Future income taxes payable 400 Ordinary shares 1,000 Retained earnings 5,360 $ 9,760 All differences

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