7. On 1 July 2016, Parent Ltd acquired 70 percent of shares in Subsidiary Ltd. On 31 March
2017 Parent Ltd sold $100,000 of inventory-type B that cost $80,000 to Subsidiary Ltd. On 1 July 2017, Subsidiary Ltd, held 10 percent of inventory. Parent Ltd and Subsidiary Ltd pay tax at 30 per cent.
In preparing consolidated journal entries for the year ending 30 June 2018, the consolidated journal entries will have
Debit Deferred tax asset 6,000
Debit Deferred tax asset 4,800
Debit income tax expense $6,000
Debit (Opening) retained earnings $6,000