On July 1, ABC Co., a calendar year corporation, purchased a business for a $2 million lump-sum price. The business' balance sheet assets had the following appraised FMV:

Accounts receivable $38,900

Inventory 450,000

Tangible personality 225,000

Realty:

Building 500,000

Land 50,000

$ 1,263,900

1. Compute the cost basis of the goodwill acquired by ABC Co. on the purchase of this business.

2. Compute ABC Co. goodwill amortization deduction for the year of purchase.

3. Use a 21 percent tax rate to compute ABC Co. deferred tax asset/liability resulting from the amortization deduction.