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. At reporting date, Jameson still held all of the goods. The company rate of tax is 30%. Which of the following consolidation adjustment entries is correct?

A) DR Income tax expense €1 200, CR Deferred tax liability €1 200
B) DR Income tax expense €1 200, CR Deferred tax asset €1 200
C) DR Deferred tax asset €1 200, CR Income tax expense €1 200
D) DR Deferred tax liability €1 200, CR Income tax expense €1 200.