Castle Ltd

question 3

Multiple Choice

Castle Ltd. acquired 100% of Bello Ltd. At the time of acquisition, Bello had assets with a tax value of $700,000, carrying value of $800,000, and fair value of $950,000. Both Castle and Bello are subject to a tax rate of 40%. What is the amount of the deferred tax liability on Castle's consolidated SFP?

• A)$40,000
• B)$60,000
• C)$100,000
• D)$280,000