Dean, Inc Owns 90 Percent of Ralph, Inc

question 12

Multiple Choice

Dean, Inc. owns 90 percent of Ralph, Inc. During the current year, Dean sold merchandise costing $80,000 to Ralph for $100,000. At the end of the year, 30 percent of this merchandise was still on hand. The tax rate is 30 percent.
Assuming that separate income tax returns are being filed, what deferred income tax asset is created?

• A) $0.
• B) $1,100.
• C) $1,800.
• D) $6,000.
• E) $9,000.

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Definitions:

Prozac

A brand name for fluoxetine, a selective serotonin reuptake inhibitor (SSRI) used to treat depression and other mood disorders.

Paxil

A medication prescribed primarily to treat depression, anxiety disorders, and other mental health conditions, known generically as paroxetine.

Zoloft

A medication commonly prescribed to treat depression, anxiety, and other mental health conditions; it belongs to the SSRI class.

Deinstitutionalisation

The policy of moving individuals with mental health conditions out of state-run institutions and then closing these facilities as part of the mental health treatment reform.