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Which of the transactions would give rise to a deferred

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Problem 1: You are preparing the consolidated financial statement for the X Company and its 80% owned subsidiary Y Ltd, for the year ended July 31st.2019. Which of the following transactions would give rise to a deferred income tax asset being recorded on the consolidated balance sheet?

Option 1: X sells inventory to Y at a markup of 30%, and Y resells all of this inventory prior to the year-end.
Option 2: X sells inventory to Y at a markup of 30%, and Y resells 60% of the inventory prior to the year end.
Option 3: Y sells inventory that it had acquired from X in the previous year to an unrelated party at a markup of 30%
Option 4: Y sells inventory that it had acquired from X in the previous year to an unrelated party at $1,000.

Reference no: EM132751164

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