King's Road recently acquired all of Oxford Corporation's stock and is now consolidating the financial data of this new subsidiary. King's Road paid a total of $940,000 for Oxford, which has the following accounts:

	Fair Value			Tax Basis
Accounts receivable	$	112,000		$	112,000
Inventory		209,000			209,000
Land		108,000			108,000
Buildings		208,500			155,000
Equipment		293,750			232,000
Liabilities		(243,000	)		(243,000	)

A.What amount of deferred tax liability arises in the acquisition?

B.hat amounts will be used to consolidate Oxford with King's Road at the date of acquisition?

C.On a consolidated balance sheet prepared immediately after this takeover, how much goodwill should King's Road recognize? Assume a 30 percent effective tax rate.

A.

What amount of deferred tax liability arises in the acquisition?

Deferred tax liability

B.

What amounts will be used to consolidate Oxford with King's Road at the date of acquisition? (Credit balances should be indicated with minus sign.)

Assigned to specific accounts
Acquisition consideration

C.

On a consolidated balance sheet prepared immediately after this takeover, how much goodwill should King's Road recognize? Assume a 40 percent effective tax rate.

Goodwill