Castle Ltd. acquired 100% of Bello Ltd. At the time of acquisition, Bello had assets with a tax value of $700,000, carry

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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 effect of
recognizing the deferred tax in accounting for the acquisition?
Question 7 options:
Increase in liabilities and decrease in goodwill
Decrease in liabilities and goodwill
Decrease in liabilities and increase in goodwill
Increase in liabilities and goodwill