Lesser Ltd is wholly owned by Moore Ltd. In the current year Lesser Ltd has made a tax loss of $200,000 and Moore Ltd has made a profit of $300,000. It is expected that Lesser Ltd will make sufficient profits in the future to utilise the benefits of the tax loss, so Lesser has recorded a deferral for the loss. Moore pays Lesser $10,000 consideration for the transfer of the tax loss. Neither Moore nor Lesser have elected to be part of a tax consolidated group. The taxation rate is 30 per cent. What are the appropriate entries to record the transfer (only)?
E) None of the given answers.

Question

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The Answer of Lesser Ltd is wholly owned by Moore Ltd. In the current year Lesser Ltd has made a tax loss of $200,000 and Moore Ltd has made a profit of $300,000. It is expected that Lesser Ltd will make sufficient profits in the future to utilise the benefits of the tax loss, so Lesser has recorded a deferral for the loss. Moore pays Lesser $10,000 consideration for the transfer of the tax loss. Neither Moore nor Lesser have elected to be part of a tax consolidated group. The taxation rate is 30 per cent. What are the appropriate entries to record the transfer (only)?
E) None of the given answers.

Lesser Ltd Is Wholly Owned by Moore Ltd