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Which deferred tax item that is recognised on consolidation

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Reference no: EM132928167

Problem 1: A subsidiary sold inventories to its parent for $100 000. The inventories originally cost the subsidiary $80 000. At balance sheet date, the parent had sold 50% of the inventories to an external party. The company tax rate is 30%. Which of the following is the deferred tax item that is recognised on consolidation?

Select one:

Option 1: Cr Deferred tax liability $3000
Option 2: Cr Deferred tax liability $6000
Option 3: Dr Deferred tax asset $6000
Option 4: Dr Deferred tax asset $3000

Reference no: EM132928167

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