Jameson Purchased Goods from Its Subsidiary for $10 000

Multiple Choice

Jameson purchased goods from its subsidiary for $10 000. The goods cost the subsidiary $6000. The company rate of tax is 30%. Which of the following consolidation adjustment entries is correct?

A) DR Tax expense $1 200, CR Deferred tax liability $1 200
B) DR Tax expense $1 200, CR Deferred tax asset $1 200
C) DR Deferred tax asset $1 200, CR Tax expense $1 200
D) DR Deferred tax liability $1 200, CR Tax expense $1 200