Parent Company P purchased 90% of Subsidiary Company S for stock worth ($100,000.) Subsidiary Company S had

Question:

Parent Company P purchased 90% of Subsidiary Company S for stock worth $$100,000.$ Subsidiary Company S had a net book value of $$50,000$ including: “bonds payable” at a book value of $$10,000$ and a fair value of S15 000 Manuel tory” with a book value of $$5,000$ and a fair value of $$7,000;$ and “PP&E with a book value of $$10,000$ and a fair value of $$20,000.$ Assuming the tax rate is 40%

(and ignoring any deferred taxes on goodwill), net deferred taxes are:

(A) $$2,520$

(B) $$2,800$

(D) $$6,800$

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