Garrison holds a controlling interest in Robertson's outstanding stock. For the current year, the following information has been gathered about these two companies: Separate operating income Dividends paid Tax rate Garrison $ 300,000 (includes $50,000 intra-entity gross profit in ending inventory) 32,000 21% Robertson $ 200,000 50,000 21% Garrison uses the initial value method to account for the investment in Robertson. Garrison's separate operating income figure does not include dividend income for the current year.
Garrison holds a controlling interest in Robertson's outstanding stock. For the current year, the following information has been gathered about these two companies: Separate operating income Dividends paid Tax rate Garrison $ 300,000 (includes $50,000 intra-entity gross profit in ending inventory) 32,000 21% Robertson $ 200,000 50,000 21% Garrison uses the initial value method to account for the investment in Robertson. Garrison's separate operating income figure does not include dividend income for the current year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
8.
Assume that Garrison owns 70 percent of Robertson's voting stock. What total amount of income tax expense does a consolidated income statement recognize? (Round your intermediate calculations and final answer to nearest whole dollar amount.)
It is not answers 96939, 94500, 103348, 95040, 99145
Transcribed Image Text:Garrison holds a controlling interest in Robertson's outstanding stock. For the current year, the following information has been
gathered about these two companies:
Separate operating income
Dividends paid
Tax rate
Garrison
$ 300,000
(includes $50,000 intra-entity gross profit
in ending inventory)
32,000
21%
Robertson
$ 200,000
50,000
21%
Garrison uses the initial value method to account for the investment in Robertson. Garrison's separate operating income figure does
not include dividend income for the current year.
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