P Corp. recorded P65,000 investment income from S Corp., its 80% owned subsidiary for 2020 and 70,000 for 2021. The inventory income represented 80% of S reported income of P81,250 for 2020 and 87,500 for 2021. P's net income (including investment income) for 2020 was P240,000 and for 2021 was P160,000. During 2020, S sold merchandise to P for P180,000. This merchandise costs P130,000 and 40% of it was not sold by P at the end of December 31, 2020. S sold merchandise that cost P150,000 to P for P210,000 during 2021. The December 31, 2021 ending inventory of P included P63,000 of this merchandise.

P Corp. recorded P65,000 investment income from S Corp., its 80% owned subsidiary for 2020 and 70,000 for 2021. The inventory income represented 80% of S reported income of P81,250 for 2020 and 87,500 for 2021. P's net income (including investment income) for 2020 was P240,000 and for 2021 was P160,000. During 2020, S sold merchandise to P for P180,000. This merchandise costs P130,000 and 40% of it was not sold by P at the end of December 31, 2020. S sold merchandise that cost P150,000 to P for P210,000 during 2021. The December 31, 2021 ending inventory of P included P63,000 of this merchandise.

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter11: The Corporate Income Tax

Section: Chapter Questions

Problem 5P: Fisafolia Corporation has gross income from operations of $210,000 and operating expenses of...

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Fisafolia Corporation has gross income from operations of $210,000 and operating expenses of $160,000 for 2019. The corporation also has $30,000 in dividends from publicly traded domestic corporations in which the ownership percentage was 45 percent. Calculate the corporation's dividends received deduction for 2019. $_____________ Assume that instead of $210,000, Fisafolia Corporation has gross income from operations of $135,000. Calculate the corporation's dividends received deduction for 2019. $___________ Assume that instead of $210,000, Fisafolia Corporation has gross income from operations of $158,000. Calculate the corporation's dividends received deduction for 2019. $_____________
GG Co. had the following transactions with two subsidiaries, OO and RR during 2020: Sales of P105,000 to OO, Inc., with P31,500 gross profit, OO had P26,250 of this inventory on hand at year end. Purchases of raw materials totaling P420,000 from RR Corp., a wholly owned subsidiary. RR’s gross profit on the sale was P84,000. GG had P98,000 of this inventory remaining on December 31, 2020. Before eliminating entries, GG had combined current assets of P525,000. What amount should GG report in its December 31, 2020 consolidated financial position for current assets?
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