Jameson Purchased Goods from Its Subsidiary for €10 000

question 3

Multiple Choice

Jameson purchased goods from its subsidiary for €10 000. The goods cost the subsidiary €6000. At reporting date, Jameson still held all of the goods. The company rate of tax is 30%. Which of the following consolidation adjustment entries is correct?

• A) DR Income tax expense €1 200, CR Deferred tax liability €1 200
• B) DR Income tax expense €1 200, CR Deferred tax asset €1 200
• C) DR Deferred tax asset €1 200, CR Income tax expense €1 200
• D) DR Deferred tax liability €1 200, CR Income tax expense €1 200.

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Definitions:

Felony Drug Conviction

A conviction for a drug-related crime that is classified as a felony, which can impact an individual's eligibility for certain benefits, employment, or licensing.

American Opportunity Tax Credit

A deduction for eligible educational expenses incurred for a qualifying student during the initial four years of post-secondary education.

Qualifying Expenses

Expenses that meet the criteria set by tax laws or other regulations for deductible or otherwise favorable treatment.

Child and Dependent Care Credit

A tax credit offered to taxpayers to offset the cost of care for qualifying dependents, enabling the taxpayer to work or look for work.