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During the current period, Rosina Limited paid an interim dividend of $60 000 to its...

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Accounting

During the current period, Rosina Limited paid an interim dividend of $60 000 to its parent entity, Anastasia Limited. If the tax rate is 30%, what would be the adjustment made in the consolidation entry to record the tax effect of this transaction at the end of the period?

  1. CR Deferred Tax Liability $18 000.
  2. There is no tax effect entry required.
  3. DR Income Tax Expense $18 000.
  4. DR Deferred Tax Asset $18 000.

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