P Co. purchased all the outstanding shares of S Co. The assets of S Co. include equipment with a historical cost of $60,000 and accumulated depreciation of $30,000. The tax base of this equipment is $20,000, and the fair value is $46,000. The tax rate is 30%. With respect to this equipment, by how much will the deferred tax liability increase when P Co. allocates the acquisition differential to calculate goodwill?

Answer rating: 100% (QA)

i At the time of acquisition the assets are recorded at fair v... View the full answer