ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
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Chapter 10, Problem 10.3C
a
To determine
Introduction:When the companies in the consolidated group files separate tax returns, intercompany income accruals and dividend transfers must be consolidated in computing income tax expense for the period. If an investor and an investee files separate tax returns, the investor is taxed on the dividends received from the investee rather than on the amount of investment income reported.
The time period when an inventory transfer cause consolidated income tax expense to be higher than the amount paid.
b
To determine
Introduction: When the companies in the consolidated group files separate tax returns, intercompany income accruals and dividend transfers must be consolidated in computing income tax expense for the period. If an investor and an investee files separate tax returns, the investor is taxed on the dividends received from the investee rather than on the amount of investment income reported.
The reporting of overpayment in consolidated financial statement, when tax payments are higher than tax expenses.
c
To determine
Introduction: When the companies in the consolidated group files separate tax returns, intercompany income accruals and dividend transfers must be consolidated in computing income tax expense for the period. If an investor and an investee files separate tax returns, the investor is taxed on the dividends received from the investee rather than on the amount of investment income reported.
The type of transfers other than inventory transfers cause consolidated income tax expense to be less than income tax paid.
d
To determine
Introduction: When the companies in the consolidated group files separate tax returns, intercompany income accruals and dividend transfers must be consolidated in computing income tax expense for the period. If an investor and an investee files separate tax returns, the investor is taxed on the dividends received from the investee rather than on the amount of investment income reported.
The type of transfers other than inventory will cause consolidated income tax expense to be more than income taxes paid.
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Question 4:
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 appropriate consolidation
adjustment entries are as follows:
Sales
Dr
15 000
Cost of Sales
Cr
13 000
Inventory
Cr
2 000
Deferred Tax Asset
Dr
300
Income Tax Expense
Cr
300
Required
(i) Discuss whether the entries suggested by Li Chen are correct, explaining on a line by line
basis the correct adjustment entries.
(ii) Determine the consolidation worksheet entries in the following year, assuming the
inventory has been-sold, and explain the adjustments on a line by line basis.
->
Income TaxationIkindly go over the following exercises for Corporations following the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) Act, Republic Act No. 11534Present your solutions in logical and good accounting form
ABC Corporation, a retailer, has a gross sales of P1.4B with a cost of sales of P560M and allowable deductions of P150M for the calendar year 2021. Its total assets of P180M as of December 31, 2021 per Audited Financial Statements includes the land costing P50M and the building of P25M in which the business entity is situated, with an aggregate amount of P75M as fixed assets. Assuming CY 2021 is the 5th year of operation of ABC Corporation, compute the Income Tax Due.
Dix Company reported operating income (loss) before income tax in its first three years of operations as follows:
20X1
$
100,000
20X2
(200,000
)
20X3
240,000
Dix had no permanent or temporary differences between book income and taxable income in these years. Assume a 21% tax rate for all years, and assume there is no valuation allowance.
Required:
What amount of taxes does Dix pay related to its 20X3 tax return?
Chapter 10 Solutions
ADVANCED FINANCIAL ACCOUNTING IA
Ch. 10 - Prob. 10.1QCh. 10 - Why are dividend payments to noncontrolling...Ch. 10 - Prob. 10.3QCh. 10 - Why are changes in inventory balances not shown in...Ch. 10 - Prob. 10.5QCh. 10 - How is an increase in inventory included in the...Ch. 10 - What portion of the sales of an acquired company...Ch. 10 - Prob. 10.8QCh. 10 - Prob. 10.9QCh. 10 - Prob. 10.10Q
Ch. 10 - Prob. 10.11QCh. 10 - Prob. 10.12QCh. 10 - Prob. 10.13QCh. 10 - Prob. 10.14QCh. 10 - How do interperiod income tax allocation...Ch. 10 - How does the use of interperiod tax allocation...Ch. 10 - Prob. 10.17QCh. 10 - Prob. 10.18QCh. 10 - Prob. 10.19QCh. 10 - When a subsidiary’s convertible bond is treated as...Ch. 10 - Prob. 10.21QCh. 10 - What effect does the presence of a noncontrolling...Ch. 10 - Prob. 10.3CCh. 10 - Consolidated Cash Flows Analysis The consolidated...Ch. 10 - Prob. 10.1ECh. 10 - Prob. 10.2ECh. 10 - Prob. 10.3ECh. 10 - Prob. 10.4ECh. 10 - Prob. 10.5ECh. 10 - Direct Method Cash Flow Statement Using the data...Ch. 10 - Prob. 10.7ECh. 10 - Prob. 10.8ECh. 10 - Prob. 10.9ECh. 10 - Prob. 10.10ECh. 10 - Prob. 10.11ECh. 10 - Prob. 10.12ECh. 10 - Prob. 10.13ECh. 10 - Prob. 10.14ECh. 10 - Effect of Convertible Bonds on Earnings per Share...Ch. 10 - Effect of Convertible Preferred Stock on Earnings...Ch. 10 - Prob. 10.17PCh. 10 - Prob. 10.18PCh. 10 - Preparing a Statement of Cash Flows—Direct Method...Ch. 10 - Prob. 10.20PCh. 10 - Prob. 10.21PCh. 10 - Prob. 10.22PCh. 10 - Prob. 10.23PCh. 10 - Prob. 10.24PCh. 10 - Prob. 10.25PCh. 10 - Prob. 10.26PCh. 10 - Prob. 10.27PCh. 10 - Prob. 10.28PCh. 10 - Prob. 10.29PCh. 10 - Prob. 10.30PCh. 10 - Prob. 10.31PCh. 10 - Prob. 10.32PCh. 10 - Prob. 10.33P
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