Morin Co Acquired All the Shares of Lightfoot Ltd

question 3

Multiple Choice

Morin Co. acquired all the shares of Lightfoot Ltd. Lightfoot has a number of amortizable capital assets and has properly recorded the related deferred income taxes on its books.
- What deferred income tax adjustment must Morin make for its consolidated financial statements?

• A)Adjustment for any changes in temporary differences due to the difference between carrying values and tax bases of Lightfoot's depreciable capital assets
• B)Adjustment for any changes in temporary differences due to the amortization of fair value increments
• C)Adjustment for any changes in temporary differences due to the amortization of goodwill
• D)No adjustment is necessary.

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