Jameson Purchased Goods from Its Subsidiary for $10 000

question 10

Multiple Choice

Jameson purchased goods from its subsidiary for $10 000. The goods cost the subsidiary $6 000. 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:

Social Support Infrastructure

Systems and services provided by communities or organizations to support the well-being and social needs of individuals or groups.

International Business

Commercial transactions that occur across country borders, including trade, investment, and operational activities.

Import/Export

The business of importing goods from foreign countries and exporting domestic goods to foreign countries.

Austerity

Austerity refers to strict economic policies aimed at reducing government deficits through spending cuts and tax increases.