A Subsidiary Sold Inventory to Its Parent for $50 000

question 41

Multiple Choice

A subsidiary sold inventory to its parent for $50 000.The inventory originally cost the subsidiary $38 000.At balance sheet date,the parent had sold 50% of the inventory to an external party.The company tax rate is 30%.Which of the following is the deferred tax item that is recognised on consolidation?

• A)Cr Deferred tax liability $3600
• B)Cr Deferred tax liability $1800
• C)Dr Deferred tax asset $3600
• D)Dr Deferred tax asset $1800

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