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    Consolidated Financial Statements - Income Taxes

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    Cremmins, Inc. owns 60 percent of Anderson. During the current year, Anderson reported net income of $200,000 but paid a total cash dividend of only $40,000. What deferred income tax liability must be recognized in the consolidated balance sheet? Assume the tax rate is 30 percent.

    a) $5,760
    b) $9,600
    c) $12,840
    d) $28,800

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    Cremmins, Inc.'s Net Income $ 200,000.00 ...

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    This solution provides a detailed, step by step explanation of the given accounting problem regarding income taxes.