Sherrin Ltd Purchased Goods from Its Subsidiary for $24 000

question 8

Multiple Choice

Sherrin Ltd purchased goods from its subsidiary for $24 000. The goods cost the subsidiary $18 000. The company rate of tax is 30%. Which of the following consolidation adjustment entries is correct?

• A) DR Income tax expense $1 800 CR Deferred tax liability $1 800.
• B) DR Income tax expense $1 800 CR Deferred tax asset $1 800.
• C) DR Deferred tax asset $1 800 CR Income tax expense $1 800.
• D) DR Deferred tax liability $1 800 CR Income tax expense $1 800.

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Definitions:

Body Language

Non-verbal communication through gestures, expressions, and bodily movements.

Sales Process

A series of steps taken by a company or sales representative to engage potential buyers and effectively convert them into customers.

Buyer's Readiness

The stages a potential customer goes through before deciding to purchase a product, including awareness, interest, desire, and action.

Beverage Distributors

Companies specialized in the distribution of drinks, ranging from soft drinks to alcoholic beverages, to various retail and hospitality establishments.