On May 1, Sessi Inc $\quad$ $\quad$ $ 38,900
Inventory $\quad$

Essay

On May 1, Sessi Inc., 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 $\quad$$\quad$ $ 38,900
Inventory $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 450,000
Tangible personality $\quad$$\quad$ 225,000
*Realty:
Building $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 500,000
Land $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 50,000
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ $1,263,900
a. Compute the cost basis of the goodwill acquired by Sessi Inc. on the purchase of this business.
b. Compute Sessi's goodwill amortization deduction for the year of purchase.
c. Use a 35 percent tax rate to compute Sessi's deferred tax liability resulting from the amortization deduction.