4. Which of the following statements best describes the required accounting treatmentwith respect to income taxes on unrealized intercompany pro?ts? A. These taxes can be ignored since an increase in income tax expense for one company is offset by an equivalent reduction in Income Tax expense for the other.B. They would be recognized as assets for the purchasing entity and liabilities for theselling entity.C. They would be recognized as assets for the sellingentity.D.They would be charged to retained earnings during the preparation of FinancialStatements.