EM owns 30% of MOCK's share capital. During the year to 31 December 2011, MOCK sold inventories at transfer price of $2,000,000 to JEM, of which 40% were still held in inventory of JEM at the year end. MOCK applies a mark-up of 25% on all goods sold. MOCK reported a net profit of $500,000 for year ended 31 December 2011. MOCK is JEM's only associate. What is share of associate's net profit after tax in JEM's consolidated profit or loss statement for year ended 31 December 2011? PLEASE PROVIDE EXPLAINTION. A) $150,000 B) $102,000 C) $38,000 D) $97,000 E) None of the above.

EM owns 30% of MOCK's share capital. During the year to 31 December 2011, MOCK sold inventories at transfer price of $2,000,000 to JEM, of which 40% were still held in inventory of JEM at the year end. MOCK applies a mark-up of 25% on all goods sold. MOCK reported a net profit of $500,000 for year ended 31 December 2011. MOCK is JEM's only associate. What is share of associate's net profit after tax in JEM's consolidated profit or loss statement for year ended 31 December 2011? PLEASE PROVIDE EXPLAINTION. A) $150,000 B) $102,000 C) $38,000 D) $97,000 E) None of the above.

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter13: Corporations: Earning & Profits And Distributions

Section: Chapter Questions

Problem 19P

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JEM owns 30% of MOCK's share capital. During the year to 31 December 2011, MOCK sold inventories at transfer price of $2,000,000 to JEM, of which 40% were still held in inventory of JEM at the year end. MOCK applies a mark-up of 25% on all goods sold. MOCK reported a net profit of $500,000 for year ended 31 December 2011. MOCK is JEM's only associate. What is share of associate's net profit after tax in JEM's consolidated profit or loss statement for year ended 31 December 2011? PLEASE PROVIDE EXPLANTION. A) $150,000 B) $102,000 C) $38,000 D) $97,000 E) None of the above.
Tane., owns 25 percent of JPW Company and applies the equity method. During the current year, Jubilee buys inventory costing $75,800 and then sells it to JPW for $124,000. At the end of the year, JPW still holds only $24,200 of merchandise. What amount of gross profit must Jubilee defer in reporting this investment using the equity method?
Luffman Inc. owns 30% of Bruce Inc. and appropriately applies the equity method. During the current year, Bruce bought inventory costing $52,000 and then sold it to Luffman for $80,000. At year-end, all of the merchandise had been sold by Luffman to other customers. What amount of gross profit on intra-entity sales must be deferred by Luffman?
Par Inc owns 77.11% of Sub Corp. During the year, Par sold inventory to Sub for $79,271. Exactly 47.83% of this inventory remained in Y's warehouse at year end. Sub sold inventory to Par for $39,636 of which 39.47% remained in X's warehouse at year end. Both companies are subject to a tax rate of 28.35%. The gross profit percentage on sales is 20% for both companies. What is the after-tax dollar value of Par's unrealized profits during the year on its sales to Sub? a. $5,433 b. $5,977 c. $5,705 d. $5,569 e. $5,841
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Big owns 60% of Little and at December 31, 2012, its Investment in Little account stands at $6,000,000. On that date Big sells half its ownership for $4,000,000 cash. a. Prepare the journal entry to be recorded by Big on December 31, 2012. c. Same facts as above, except the sales price is $2,500,000 cash. Prepare the journal entry to be recorded by Big on December 31, 2012.
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A owns 30% of the stock of B. During the year, A sold inventory to B for $ 96,000. A charges a profit of 20% on cost. At the end of the year, B had $ 24,000 of the inventory still on hand. What is the unrealized profit on this sale? (A) $ 1,200 (B) $ 1,440 (C) $ 16,000 (D) $ 19,200
Roberts owns 40% of Simpson. On April 1, 2020 Roberts reduces its ownership of Simpson to 10%. From January 1-March 31 Simpson earns $80,000 and pays dividends of $30,000. From April 1- December 31 Simpson earns $300,000 and pays dividends of $100,000. What is the total income reported by Roberts in 2020
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 Lake paid a $60,000 cash dividend during the current year and Boxwood distributed $14,000. Boxwood sells inventory to Lake each period. Intra-entity gross profits of $27,000 were present in Lake's beginning inventory for the current year, and its ending inventory carried $39,000 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. $ 303,000 149,000 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…
Pea acquired 75% of the equity shares of Hion on 31 August 20X9. The statement of profit or loss extracts for the year ended 31 December 20X9 showed: Pea Hion Revenue 240,000 148,800 Cost of sales 60,000 38,400 During the post-acquisition period, sales of $6,000 were made by Pea to Hion. Half of these goods remained in the inventory at the year-end. Pole had made a mark-up on cost of 25% on these sales. What is the group cost of sales for Pea Group for the year ended 31 December 20X9? A. $133,400 B. $132,200 C. $83,400 D. $67,400