Tax loss carryover. Lakecraft Company has the following balance sheet on December 31, 2015, when it is acquired for $950,000 in cash by Argo Corporation: Lakecraft Company All assets have fair...

Tax loss carryover. Lakecraft Company has the following balance sheet on December 31, 2015, when it is acquired for $950,000 in cash by Argo Corporation:

Lakecraft Company

All assets have fair values equal to their book values. The combination is structured as a taxfree exchange. Lakecraft Company has a tax loss carryforward of $300,000, which it has not recorded. The balance of the $300,000 tax loss carryover is considered fully realizable. Argo is taxed at a rate of 30%.

Record the acquisition of Lakecraft Company by Argo Corporation.