Tate, Inc Owns 80 Percent of Jeffrey, Inc

Multiple Choice

Tate, Inc. owns 80 percent of Jeffrey, Inc. During the current year, Jeffrey sold merchandise costing $60,000 to Tate for $75,000. At the end of the year, 10 percent of this merchandise was still being held. The tax rate is 30 percent.
Assuming that separate income tax returns are being filed, what deferred income tax asset is created?

A) $0.
B) $360.
C) $450.
D) $2,250.
E) $3,600.