OBJECTIVES: I. Evaluate if front line induction therapy with daunorubicin, vincristine, prednisone, and asparaginase is sufficiently effective to warrant a phase III trial in patients with acute lymphocytic leukemia (ALL). II. Assess the toxicity of this regimen in this patient population. III. Assess disease free and overall survival and toxicity associated with allogeneic bone marrow transplantation for ALL patients in first remission following induction and consolidation therapy. IV. Assess disease free and overall survival and toxicity associated with sequential regimens of mercaptopurine, methotrexate and vincristine, doxorubicin, dexamethasone, and cyclophosphamide, thioguanine, and cytarabine in ALL patients in first remission who are ineligible for allogeneic bone marrow transplantation. V. Evaluate the prognostic significance of cell surface immunophenotype, Philadelphia chromosome, and polymerase chain reaction detected BCR/abl fusion in this patient population.