On 1 July 2015 Sarah Ltd acquires all the shares in Jane Ltd for $610,000 cash

The financial statements of Jane Ltd as at 1 July 2015 shows the following:

Retained earnings 185,000

Share capital 137,000

The tax rate is 30%

At the date of acquisition all the net assets of Jane Ltd are at fair value except for the following:

	Carrying amount	Fair value
Land	$140,000	$212,000
Equipment (cost $205,000)	$137,000	$188,000

The land was sold on 1 April 2018 for $240,000 and the equipment has a further 15 years of useful life from the date of acquisition.

All worksheet adjustment entries at date of consolidation on 30 June 2020 are as follows:

Dr. Retained earnings	$185,000
Dr. Share capital	$137,000
Dr. BCVR	$86100
Dr. Goodwill
Cr. Investment in Jane Ltd		$610,000

Dr. Retained earnings	( 212,000 140,000 ) x 70%
Cr. BCVR		( 212,000 140,000 ) x 70%

Dr. Accumulated depreciation	205,000 137,000
Dr.(or Cr.) Equipment
Cr. BCVR		( 188,000 137,000 ) x 70%
Cr. DTL		( 188,000 137,000 ) x 30%

Dr. Retained earnings	4 x ( 188,000 137,000 ) / 15
Dr. Depreciation expense	( 188,000 137,000 ) / 15
Cr. Accumulated depreciation		5 x ( 188,000 137,000 ) / 15

Dr. DTL	xxx
Cr. Income tax expense		( 188,000 137,000 ) x 30% / 15
Cr. Retained earnings

Calculate and enter the amount of xxx (DTL) in the answer block below:

Answer: