During the Year Ended 30 June 2017, a Parent Entity $\begin{array}{llll}\text { Rent revenue } & \mathrm{Dr} & 200000 \\\text { Rent expense } & \mathrm{Cr} &&200000\end{array}$

question 8

Short Answer

During the year ended 30 June 2017, a parent entity rents a warehouse from a subsidiary entity for $200 000. The company tax rate is 30%. Which of the following is the consolidation adjustment entry needed at reporting date to eliminate the transaction? $\begin{array}{llll}\text { Rent revenue } & \mathrm{Dr} & 200000 \\\text { Rent expense } & \mathrm{Cr} &&200000\end{array}$


$\begin{array}{llll}\text { Rent revenue } & \mathrm{Dr} & 200000 & \\\text { Rent expense } & \mathrm{Cr} & & 200000 \\\text { Income tax expense } & \mathrm{Dr} & 60000 & \\\text { Deferred tax liability } & \mathrm{Cr} & & 60000\end{array}$

$\begin{array}{llrr}\text { Rent revenue } & \mathrm{Dr} & 200000 & \\\text { Rent expense } & \mathrm{Cr} & &200000 \\\text { Deferred tax asset } & \mathrm{Dr} & 600000 & \\\text { Income tax expense } & \mathrm{Cr} & & 60000\end{array}$

$\begin{array}{l}\text { Rent expense }&& \mathrm{Dr} &200000&\\\text { Rent revenue }&&\text { Dr } &&200000\end{array}$

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Definitions:

Acquisitive

Having a strong desire to acquire material possessions or gain new knowledge.

Achieving

The act of successfully reaching a goal or objective through effort, skill, or courage, often recognized with a sense of accomplishment.

Reorganization

A process undertaken by companies or entities to rearrange their legal, ownership, operational, or other structures for efficiency, survival, or growth.

Componential Intelligence

An aspect of intelligence theory that focuses on an individual's analytical abilities, including problem-solving, logical reasoning, and the handling of complex concepts.