Reference no: EM132489249

Brady's listing of deferred tax assets and liabilities includes the following for operations in the tax jurisdictions of Tambura and Nileboo:

Tambura:

Deferred tax asset of $11 million

Valuation allowance of $8 million

Deferred tax liability of $20 million

Nileboo:

Deferred tax asset of $36 million

Deferred tax liability of $9 million

Question 1: Brady files separate tax returns in Tambura and Nileboo. Brady's balance sheet would include the following disclosure of deferred tax assets and liabilities:

Multiple Choice

Option 1: A deferred tax asset of $10 million.

Option 2: A deferred tax liability of $23 million and a deferred tax asset of $33 million.

Option 3: A deferred tax liability of $17 million and a deferred tax asset of $27 million.

Option 4: A deferred tax liability of $31 million and a deferred tax asset of $41 million.