If Papa and Bambina file separate income tax returns, what deferred income tax is created?
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Papa Corporation owns 85% of Bambina Company. Papa sold Bambina goods for $180,000 over the last year. The goods cost Papa $120,000. The tax rate is 40%, and by the end of the year 1/3 of the goods are still in Bambina inventory. If Papa and Bambina file separate income tax returns, what
Answer:
$8,000
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