1. If a business combination (for financial accounting) is a “tax-free corporate reorganization”

for income tax purposes, in the journal entry to record the business combination, the current fair value excesses of the combinee’s identifiable net assets are:

a. Disregarded.

b. The basis for a credit to Deferred Income Tax Liability.

c. Credited to the affected asset accounts.

d. Credited to retained earnings of the combinor.