Solution-What would the amount of deferred tax to be

What would the amount of deferred tax to be recorded

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Reference no: EM133009127

Question - X Inc. owns 80% of Y Inc. You were given the following information for intercompany transactions in 2020:

X sold inventory to Y. The profit before tax on this sale was $10,000. 60% of the inventory remained in the warehouses of Y at the end of the years.

Y sold inventory to X. The profit before tax on this sale was $15,000. 25% of the inventory remained in the warehouse of X at the end of the year.

Y sold land to X at before tax profit of $50,000.

Required - What would the amount of deferred tax to be recorded on the consolidated balance sheet at the end of the year for the sale of inventory to X by Y? Assume a tax rate of 40%.

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What would the amount of deferred tax to be recorded

Reference no: EM133009127

Reference no: EM133009127

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