Advanced Accounting (Looseleaf)
12th Edition
ISBN: 9780077632595
Author: Hoyle
Publisher: MCG
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Question
Chapter 7, Problem 22P
a.
To determine
Determine the total income tax expense which must be reported on a consolidated income statement for this period if Company L owns a 60 percent interest in Company B.
b.
To determine
Find the total amount of income taxes which must be paid by these two companies for the current year.
c.
To determine
Find the amount of income tax expense would be reported on a consolidated income statement for the year.
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Lake acquired a controlling interest in Boxwood several years ago. During the current fiscal period, the two companies individually
reported the following income (exclusive of any investment income):
Lake
Boxwood
$ 329,000
110,000
Lake paid a $75,000 cash dividend during the current year, and Boxwood distributed $15,000.
Boxwood sells inventory to Lake each period. Intra-entity gross profits of $20,400 were present in Lake's beginning inventory for the
current year, and its ending inventory carried $35,900 in intra-entity gross profits.
View each of the following questions as an independent situation. The effective tax rate for both companies is 21 percent.
a. If Lake owns a 60 percent interest in Boxwood, what total income tax expense must be reported on a consolidated income
statement for this period? (Round the intermediate calculations and final answers to the nearest dollar amount.)
b. If Lake owns a 60 percent interest in Boxwood, what total amount of income taxes must be paid by…
Lake acquired a controlling interest in Boxwood several years ago. During the current fiscal period, the two companies individually
reported the following income (exclusive of any investment income):
Lake
Boxwood
$ 308,000
100,000
Lake paid a $70,000 cash dividend during the current year, and Boxwood distributed $18,000.
Boxwood sells inventory to Lake each period. Intra-entity gross profits of $25,200 were present in Lake's beginning inventory for the
current year, and its ending inventory carried $38,700 in intra-entity gross profits.
View each of the following questions as an independent situation. The effective tax rate for both companies is 21 percent.
a. If Lake owns a 60 percent interest in Boxwood, what total income tax expense must be reported on a consolidated income
statement for this period? (Round the intermediate calculations and final answers to the nearest dollar amount.)
b. If Lake owns a 60 percent interest in Boxwood, what total amount of income taxes must be paid by…
Lake acquired a controlling interest in Boxwood several years ago. During the current fiscal period, the two companies individually reported the following income (exclusive of any investment income):Lake paid a $90,000 cash dividend during the current year and Boxwood distributed $10,000.Boxwood sells inventory to Lake each period. Intra-entity gross profits of $18,000 were present in Lake’s beginning inventory for the current year, and its ending inventory carried $32,000 in intra-entity gross profits.View each of the following questions as an independent situation. The effective tax rate for both companies is 40 percent.a. If Lake owns a 60 percent interest in Boxwood, what total income tax expense must be reported on a consolidated income statement for this period?b. If Lake owns a 60 percent interest in Boxwood, what total amount of income taxes must be paid by these two companies for the current year?c. If Lake owns a 90 percent interest in Boxwood and a consolidated tax return is…
Chapter 7 Solutions
Advanced Accounting (Looseleaf)
Ch. 7 - Prob. 1QCh. 7 - Prob. 2QCh. 7 - Prob. 3QCh. 7 - How does the presence of an indirect ownership...Ch. 7 - Prob. 5QCh. 7 - In accounting for mutual ownerships, what is the...Ch. 7 - Prob. 7QCh. 7 - Prob. 8QCh. 7 - Prob. 9QCh. 7 - Prob. 10Q
Ch. 7 - Prob. 11QCh. 7 - Jones acquires Wilson, in part because the new...Ch. 7 - Prob. 13QCh. 7 - Prob. 1PCh. 7 - Prob. 2PCh. 7 - Prob. 3PCh. 7 - Which of the following is correct for two...Ch. 7 - Prob. 5PCh. 7 - Prob. 6PCh. 7 - Prob. 7PCh. 7 - Prob. 8PCh. 7 - Prob. 9PCh. 7 - Prob. 10PCh. 7 - Prob. 11PCh. 7 - Prob. 12PCh. 7 - Prob. 13PCh. 7 - Prob. 14PCh. 7 - Prob. 15PCh. 7 - Prob. 16PCh. 7 - Prob. 17PCh. 7 - Prob. 18PCh. 7 - Prob. 19PCh. 7 - Clarke has a controlling interest in Rogerss...Ch. 7 - Prob. 21PCh. 7 - Prob. 22PCh. 7 - Prob. 23PCh. 7 - Prob. 24PCh. 7 - Prob. 25PCh. 7 - Prob. 26PCh. 7 - Prob. 27PCh. 7 - Prob. 28PCh. 7 - Prob. 29PCh. 7 - Prob. 1DYSCh. 7 - Access The Coca-Cola Company’s 2012 financial...
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