Dean, Inc. owns 90 percent of Ralph, Inc. During the current year, Dean sold merchandise costing $80,000 to Ralph for $100,000. At the end of the year, 30 percent of this merchandise was still on hand. The tax rate is 30 percent.
Assuming that a consolidated income tax return is being filed, what deferred income tax asset is created?

Question

Quizplus · Accepted Answer

The Answer of Dean, Inc. owns 90 percent of Ralph, Inc. During the current year, Dean sold merchandise costing $80,000 to Ralph for $100,000. At the end of the year, 30 percent of this merchandise was still on hand. The tax rate is 30 percent.
Assuming that a consolidated income tax return is being filed, what deferred income tax asset is created?

Dean, Inc Owns 90 Percent of Ralph, Inc