Vibe Company Purchased the Net Assets of Atlantic Company in a Business

Multiple Choice

Vibe Company purchased the net assets of Atlantic Company in a business combination accounted for as a purchase.As a result, goodwill was recorded.For tax purposes, this combination was considered to be a tax-free merger.Included in the assets is a building with an appraised value of $210,000 on the date of the business combination.This asset had a net book value of $70,000.The building had an adjusted tax basis to Atlantic (and to Vibe as a result of the merger) of $120,000.Assuming a 40% income tax rate, at what amount should Vibe record this building on its books after the purchase?
$\begin{array}{lc} & \text { Deferred Tax } \\ \text { Building } & \text { Liability }\end{array}$

A) ?$174,000 $\quad$$\quad$$\quad$$\quad$ $ 0
B) ?$140,000 $\quad$$\quad$$\quad$$\quad$ $36,000
C) ?$210,000 $\quad$$\quad$$\quad$$\quad$ $90,000
D) ?$210,000 $\quad$$\quad$$\quad$$\quad$ $36,000