Reggie, Inc

Multiple Choice

Reggie, Inc. owns 70% of Nancy Corporation. During the current year, Nancy reported operating income before tax of $100,000 and paid a dividend of $30,000. The income tax rate for both companies is 30%. What deferred income tax liability arising in the current year must be recognized in the consolidated balance sheet?

A) $1,680.
B) $2,400.
C) $1,470.
D) $9,800.
E) $2,940.