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 $6 000. 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.