A subsidiary sold goods costing P1.2 million to its parent for P1.4 million. All of the inventory is held by the parent at year-end. The subsidiary is 80% owned and the parent and subsidiary operate in different tax jurisdictions. The parent pays taxation at 30% and the subsidiary pays taxation at 30%. Calculate any deferred tax asset that arises on the sale of the inventory to the parent. a. P 60,000 c. P48,000 b. P200,000 d. P80,000
Q: Suppose an additional R300 000 is spent on advertising in order to increase the sales by 3 000…
A: Selling price per pallet 500 Variable costs per pallet Direct material (0.14 × 500) 70…
Q: How does the payback period approach capital budgeting? Examples of 1 advantage and 1 disadvantage?
A: Pay back period approch in capital budgeting is use to analysis two or more projects. The project…
Q: On June 7, 2006, Hawk Corporation sold a tract of land for P70,000 that resulted in a P30,000 gain…
A: The gain arises when the selling price is greater than the purchase price of the asset. The revenue…
Q: Earnings per share Financial statement data for the years 20Y5 and 20Y6 for Black Bull Inc. follow:…
A: The earnings per share show how much profit is attributable to a common share. The earning per share…
Q: The following accounts and normal balances existed at year-end. Make the four journal entries…
A: Preparation of closing entries is a method used by the business entity to close its temporary…
Q: Question 6.4…
A: The Service Department cost can be allocated to the production department by using different…
Q: A company wants to pay a bonus to an employee so that the net pay is $10,000. The federal income tax…
A: Federal income tax, State income tax and FICA tax are to be deducted from the bonus paid. We…
Q: Is there a formula (not in excel) that can be used to calculate this?
A: We can use present value formula and present value annuity factor table to calculate number of…
Q: Accounting Your firm is selling a 3-year old machine that has a 5-year class life. The machine…
A: Introduction: Working capital affects a number of business processes, including paying suppliers and…
Q: During the year, Natalie rented out the condo for 75 days, receiving $10,000 of gross income. She…
A: Given Information Insurance = 1,000 Advertising Expense = 500 Mortgage Interest = 3,400 Property…
Q: Compute Rome’s regular hourly and overtime rates.
A: Sometimes Business Entities have shortage of time and they have to fulfill the given order within…
Q: a. What type of lease is this? Explain b. Record the journal entries in the book of lessee. c.…
A: Given in the question: Lease Date January 1, 2010 Term (in Years) 4 Annual Rentals…
Q: On October 1, Year 7 Durian Co. of Quebec, ordered merchandise from MAGA Co. of US. The purchase…
A: Hedging is an activity that is performed or undertaken in order to mitigate the risks of possible…
Q: Beginning inventory, purchases, and sales for Item XJ-56 are as follows: May 1 Beginning…
A: Inventory is one of the important current asset of the business, which includes inventory of raw…
Q: The following information was extracted from the book of XY Ltd for the year 30 September 2016.…
A: Financial Statement - Financial statements include information about the financial activity and…
Q: Lomax Ltd sells the bricks that it produces in pallets, with each pallet containing 500 bricks. The…
A: Note: As per our guidelines we will solve the first three subparts for you 1. Variable Cost…
Q: Tulip Corp. purchased 300,000 shares of common stock in Sherman Co. for $50 per share on January 2,…
A: Income statement is the financial statement which is prepared to show the profitability of an…
Q: On 31/03/2022, Sea Ltd (the parent) sold equipment with a carrying amount of $290,000 to Bill Ltd…
A: depreciation is charged on yearly basis by taking certain percentage. there are different method…
Q: Assume that a company has two cost drivers—number of textbooks and number of instructors. The…
A: Spending Variance :— It is difference between flexible budget cost and actual cost. Flexible…
Q: Juliana opened a savings account with $467. The savings account compounds the interest annually and…
A: Time Value of money :— According to this concept, Value of money today is greater than value of…
Q: Php20 par value share was required by the corporation at Php50 and resold at Php90. A paid-in…
A: Treasury stock :— It is the stock that is bought back by issuing company for cash. It is the buyback…
Q: Share dividends OA. have no effect on total shareholders' equity OB. are distributions of cash to…
A: Lets understand the basics. Common stockholders invested in stock in order to gain soeme return on…
Q: For Taxable Capital Gains, Line 12700, please choose the best and most accurate answer: Canit
A: Before the assessment year 2019-20, Line 12700 was line 127. Line 12700 in Canadian taxation talks…
Q: On December 31, Sulfur Corporation has the following data available: Net income $100,000…
A: Leverage Ratio :— It is the financial indicator to measure ability to pay future financial…
Q: PSMO Company currently uses normal costing method in accumulating the cost o production. The…
A: Total manufacturing costs includes raw material used, direct labour costs incurred and all overhead…
Q: Phillips Equipment Inc. has 72,000 bonds outstanding that are each selling at $1,066 in the market.…
A: Note: Hi! Thank you for the question, As per the honor code, we are allowed to answer three…
Q: thilaire Corporation is working on its direct labor budget for the next two months. Each unit of…
A: Answer : Total Direct Labor Cost = Direct Labor cost per hour * Total direct labor hours paid
Q: In the current year, Ralph reports an adjusted gross income of $100,000 and also pays medical and…
A: Deduction :— A deduction is an expense that can be subtracted from a taxpayer's gross income in…
Q: Martin Company incurred the following costs for 50,000 units: Variable $180,000 costs Fixed costs…
A: Break-even point (BEP): Breakeven is the point where total expenses are equal to total revenue. at…
Q: Sebastian, Wyatt, and Mathew are close friends who graduated with master's degrees in accounting…
A: The legal identity of a Limited Liability Partnership (LLP) is distinct from that of its…
Q: Show Attempt History. Current Attempt in Progress Wildhorse Corporation began 2020 with a $52,440…
A: Income tax payable = Taxable income × Tax rate
Q: For Chamiching, which of the following is true? Variable costing income (VCI) exceeds full…
A: Variable Cost :— Variable Cost is the part of Marginal Costing. Variable Cost Vary on per unit…
Q: Mr. Juan Lopez launched Lopez Fiesta Mart on December 1, 2022 with a cash investment of 220,000. The…
A: Adjustment entries is made to show clear picture of income and expenditure. It can be made on…
Q: . Compute the number of units of each product that must be sold for Gosnell Company to break even.…
A: CVP Analysis :- Cost-volume-profit (CVP) analysis is a method of Cost Accounting that looks at the…
Q: The following budgeted profit statement has been prepared using absorption costing principles. A…
A: Variable costs are those costs which changes along with change in activity level. Fixed costs are…
Q: eBook Variable Cost Method of Product Pricing Smart Stream Inc. uses the variable cost method of…
A: The costs are classified as variable costs and fixed costs. The variable costs are changed with…
Q: Instructions Prepare a sales budget for February. Prepare a production budget for February. Prepare…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: On July 1, 2019, Cyclic Inc issued $1,000,000 in principal of 6% bonds due in July 2024. The bond…
A: Bond :— It is one of the source of capital which gives fixed rate of interest and maturity value at…
Q: VIP Corporation's first year of operations had the following transactions: 2020 Jan. 15 Issued 2,000…
A: On issuing the shares in the market, the stock account is credited by the par value of the shares…
Q: Assume the following information for a capital budgeting proposal with a five-year time horizon:…
A: Internal rate of return (IRR): IRR is a rate at which the present value of cash inflows is equal to…
Q: Calculate all possible liquidity ratios for 2021 and 2020. (Round current ratio to 2 decimal places…
A: Ratio analysis can be used to assess a company's financial stability or soundness. Shareholders…
Q: Determine the gain on bargain purchase or goodwill as at acquisition date.
A: Given in the question: Shareholders Equity Share Capital $30,00,000.00 General…
Q: 4. BE.12.03.ALGO 5. BE.12.08.ALGO 6. BE.12.01.ALGO 7. BE.12.07 8. BE.11.07 stock. The following…
A: There are two types of stocks. One is preferred stock and the other is common stock. Preferred…
Q: You invest $10023.82 in a short-term deposit at 4.3% from June 27, 2019 to December 11, 2019. What…
A: Investment :— Investment is the dedication of an asset to attain an increase in value over a period…
Q: a. Discuss the various operational budgets prepared for: (i) a service organisation (ii) a trading…
A: Before going for the various operational budget we need to understand the meaning of Operational…
Q: Donna purchased investment land on January 1, Year 3, for $150,000. On January 1, Year 5, she sold…
A: Introduction: The profit a company makes after subtracting the costs of manufacturing, selling, and…
Q: On December 31st, Datton, Inc. has cost of goods sold of $540,000. ending inventory is $100,000,…
A: Accounts payable turnover is the ratio which is used to measure the rate at which the entity is…
Q: Save & E A machine with a cost of $136,000 and accumulated depreciation of $88,000 is sold for…
A: Operating Activities are the main activities of the Business Entity which are performed by it in the…
Q: Dividends Per Share Oceanic Company has 25,000 shares of cumulative preferred 2% stock, $150 par and…
A: Dividend - Dividend is the amount distributed to the shareholders of the company. It is declared by…
Q: During the first month of liquidation, half of the inventory was sold for $60,000 and half of the…
A: Partnership Liquidation A partnership liquidation entails the gathering of the business's remaining…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Paloma, Inc., owns 90 percent of Blanca Corporation. Both companies have been profitable for many years. During the current year, the parent sold merchandise to the subsidiary at a transfer price of $194,000. In recording the transfer, the parent recognized cost of goods sold of $139,000. At the end of the year, the subsidiary still held 40 percent of this merchandise in its inventory. Assume that the tax rate is 21 percent. What deferred income tax asset amount is created if a consolidated tax return were filed?Plumas, Inc., owns 75 percent of Santa Cruz Corporation. Both companies have been profitable for many years. During the current year, the parent sold for $134,500 merchandise costing $102,000 to the subsidiary, which still held 20 percent of this merchandise at the end of the year. Assume that the tax rate is 30 percent and that a consolidated tax return was filed. What deferred income tax asset amount is created?Ocean Ltd is the parent entity to the wholly owned subsidiaries of River Ltd, Creek Ltd, and Puddle Ltd. During the year ended 30 June 2022 the following transactions occurred within Ocean Ltd group. The perpetual inventory system has been adopted by all entities in the Ocean Ltd group and the tax rate is 30% for all accounting periods. On 01 July 2021 Ocean Ltd sold an item of equipment to Creek Ltd for $850,000 cash. The original cost of the equipment was $950,000. Ocean Ltd adopted an accounting policy whereby equipment was being depreciated on a straight line basis over its useful life of 8 years. The carrying amount of the equipment in Ocean Ltd financial statements at the date of sale was $520,000. Subsequent to the transfer, Creek Ltd depreciated the equipment on a straight line basis over its remaining useful life of 3 years. Required: Fill in the missing amount for the following accounts that will appear in the consolidated adjusting journal…
- Plumas, Inc., owns 85 percent of Santa Cruz Corporation. Both companies have been profitable for many years. During the current year, the parent sold for $100,000 merchandise costing $70,000 to the subsidiary, which still held 20 percent of this merchandise at the end of the year. Assume that the tax rate is 25 percent and that separate tax returns are filed. What deferred income tax asset amount is created?a. –0–b. $300c. $1,500d. $7,500During 20x9, PP Corporation recorded sales of inventory costing P500,0000 to SS Company, its wholly owned subsidiary, on the same terms as sales made to third parties. At December 31,20x9, SS held one-fifth of this goods inventory. The following information pertains to PP and SS’s sales for 20x9: (see image below) In its 20x9 consolidated income statement, what amount should PP report as cost of sales?Hot Plc owns 80% of the issued share capital of Warm Plc and 40% of the issued share capital of Cold Plc. In the individual accounts, the income tax expenses for the year are as follows:3Hot Plc GH¢20,000Warm Plc GH¢18,000Cold Plc GH¢10,000At what amount should the income tax expense appear in the consolidated statement of profit or loss? [Note: The share of profit of Associate is shown in the statement of profit or loss at a figure net of tax]
- Harrison Corporation, a C corporation, is part of a consolidated group, with assets consisting of inventory with a pre-transaction tax basis of $3,200 and value of $40,000. Harrison also has $3,200 of liabilities. Debra Smith acquires 100% of Harrison's outstanding stock for $36,800, and the parties make a Sec. 338(h)(10) election. Prepare a letter to Debra that answers the following questions: What is Harrison Corp.'s adjusted grossed-up basis (AGUB)? What is the inventory's allocated tax basis? How much gain will be realized when the inventory is sold?Corporation P owns a controlling stock interest in Subsidiary S and Subsidiary T. Corporation P’s marginal tax rate is 21 percent. It engages in one transaction that shifts $10,000 income to Subsidiary S and a second transaction that shifts a $15,000 deduction to Subsidiary T. Based on these facts, what conclusions can you draw about marginal tax rates of the two subsidiaries?Nasty is a wholly owned subsidiary of Ugly. Inventories in their individual statements of financial position at the year end are shown as: Ugly $40,000 Nasty $20,000 Sales by Ugly to Nasty during the year were invoiced at $15,000 which included a profit by Ugly of 25% on cost. Two thirds of these goods were included in inventories at the year end. At what value should inventories appear in the consolidated statement of financial position?
- Clarke has a controlling interest in Rogers’s outstanding stock. At the current year-end, the following information has been accumulated for these two companies: Seperate operating income Dividends Paid Clarke $50000 (includes a $90000 net gross profit in intra entity ending inventory) $90000 Rogers 24000 80000 Clarke uses the initial value method to account for the investment in Rogers. The separate operating income figures just presented include neither dividend nor other investment income. The effective tax rate for both companies is 40 percent.a. Assume that Clarke owns 100 percent of Rogers’s voting stock and is filing a consolidated tax return. What income tax amount does this affiliated group pay for the current period?b. Assume that Clarke owns 92 percent of Rogers’s voting stock and is filing a consolidated tax return. What amount of income taxes does this affiliated group pay for the current period?c. Assume that Clarke owns 80 percent of Rogers’s voting stock,…Jessica Ltd sold inventory during the current period to its wholly owned subsidiary, Amelie Ltd, for $15 000.These items previously cost Jessica Ltd $12 000. Amelie Ltd subsequently sold half the items to Ningbo Ltd for$8000. The tax rate is 30%. The group accountant for Jessica Ltd, Li Chen, maintains that the appropriateconsolidation adjustment entries are as follows: Sales dr 15000 Cost of Sales cr 13000Inventory cr 2000Deferred Tax Asset dr300Income Tax Expense cr 300Required(i) Discuss whether the entries suggested by Li Chen are correct, explaining on a line-by-line basisthe correct adjustment entry. (ii)Determine the consolidation worksheet entries in the following year, assuming the inventoryhas been –sold, and explain the adjustments on a line-by-line basis. (b) On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for $450000 when its’ carrying value in Liala Ltd bookwas $600000…Maatex Inc., an accrual-basis taxpayer, transferred an operating division to a newly incorporated subsidiary, Taylor Inc., in exchange for 100% of Taylor’s newly issued common stock. The division’s business assets were worth $900,000 and had a tax basis of $440,000. The division also had $82,000 of accounts payable which were assumed by Taylor Inc. as part of the incorporation transaction. Required Should Maatex Inc. recognize any of its $460,000 realized gain on the exchange of property for stock and debt relief? How would your answers to these questions change if the accounts payable assumed by Taylor totaled $500,000 rather than only $82,000?