On January 1, 2023, Abbey acquires 90 percent of Benjamin's outstanding shares. Financial information for these two companies forthe years 2023 and 2024 follows (credit balances indicated by parentheses):ItemsAbbey Company:SalesOperating expensesIntra-entity gross profits in ending inventory(included in above figures)Dividend income-Benjamin CompanyBenjamin Company:Salesa. Income tax expensea. Income tax payableb. Income tax expenseb. Income tax payable2023Amount$ (785,000) $ (1,042,000)536,000662,000(148,000)(22,500)2024(330,000)167,000(25,000)(168,000)(27,000)Operating expensesDividends paidAssume that a tax rate of 21 percent is applicable to both companies.Required:a. On consolidated financial statements for 2024, what are the income tax expense and the income tax currently payable if Abbey andBenjamin file a consolidated tax return as an affiliated group?b. On consolidated financial statements for 2024, what are the income tax expense and income tax currently payable if they choose tofile separate returns?(335,000)206,000(30,000)

On January 1, 2023, Abbey acquires 90 percent of Benjamin's outstanding shares. Financial information for these two companies for the years 2023 and 2024 follows (credit balances indicated by parentheses): Items Abbey Company: Sales Operating expenses Intra-entity gross profits in ending inventory (included in above figures) Dividend income-Benjamin Company Benjamin Company: Sales 2023 a. Income tax expense a. Income tax payable b. Income tax expense b. Income tax payable $ (785,000) $ (1,042,000) 536,000 662,000 (148,000) (22,500) Operating expenses Dividends paid Assume that a tax rate of 21 percent is applicable to both companies. Amount (330,000) 167,000 (25,000) 2024 (168,000) (27,000) Required: a. On consolidated financial statements for 2024, what are the income tax expense and the income tax currently payable if Abbey and Benjamin file a consolidated tax return as an affiliated group? (335,000) 206,000 (30,000) b. On consolidated financial statements for 2024, what are the income tax expense and income tax currently payable if they choose to file separate returns?

On January 1, 2023, Abbey acquires 90 percent of Benjamin's outstanding shares. Financial information for these two companies for the years 2023 and 2024 follows (credit balances indicated by parentheses): Items Abbey Company: Sales Operating expenses Intra-entity gross profits in ending inventory (included in above figures) Dividend income-Benjamin Company Benjamin Company: Sales 2023 a. Income tax expense a. Income tax payable b. Income tax expense b. Income tax payable $ (785,000) $ (1,042,000) 536,000 662,000 (148,000) (22,500) Operating expenses Dividends paid Assume that a tax rate of 21 percent is applicable to both companies. Amount (330,000) 167,000 (25,000) 2024 (168,000) (27,000) Required: a. On consolidated financial statements for 2024, what are the income tax expense and the income tax currently payable if Abbey and Benjamin file a consolidated tax return as an affiliated group? (335,000) 206,000 (30,000) b. On consolidated financial statements for 2024, what are the income tax expense and income tax currently payable if they choose to file separate returns?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On January 1, 2017, Abbey acquires 90 percent of Benjamin's outstanding shares. Financial information for these two companies for the years of 2017 and 2018 follows: 2017 2018 Abbey Company: Sales $ (684,000 ) $ (1,004,000 ) Operating expenses 462,000 516,000 Intra-entity gross profits in ending inventory (included in above figures) (213,000 ) (247,000 ) Dividend income—Benjamin Company (13,500 ) (31,500 ) Benjamin Company: Sales (307,000 ) (361,000 ) Operating expenses 162,000 209,000 Dividends paid (15,000 ) (35,000 ) Assume that a tax rate of 40 percent is applicable to both companies. On consolidated financial statements for 2018, what are the income tax expense and the income tax currently payable if Abbey and Benjamin file a consolidated tax return as an affiliated group? On consolidated financial statements for 2018, what are the income tax expense and income tax currently…
4. Determine the net income attributable to P Corporation using the information below:
On January 1, 2020, Abbey acquires 90 percent of Benjamin's outstanding shares. Financial information for these two companies for the years 2020 and 2021 follows (credit balances indicated by parentheses): 2020 2021 Abbey Company: Sales Operating expenses Intra-entity gross profits in ending inventory (included in above figures) Benjamin Company: Dividend income-Benjamin Company Operating expenses Dividends paid Sales $ (710,000) $ (1,102,000) 440,000 666,000 (125,000) (9,000) (222,000) (40,500) (328,000) 202,000 (10,000) (400,000) 230,000 (45,000) Assume that a tax rate of 21 percent is applicable to both companies. a. On consolidated financial statements for 2021, what are the income tax expense and the income tax currently payable if Abbey and Benjamin file a consolidated tax return as an affiliated group? b. On consolidated financial statements for 2021, what are the income tax expense and income tax currently payable if they choose to file separate returns?
Determine the net income attributable to P Corporation using the information below
Comparative income statements of Sub Corporation for the calendar years 2019, 2020, and 2021 are as follows (in thousands): 2019 2020 2021Sales $22,000 $18,500 $19,250Cost of sales 10,600 9,900 10,100Gross profit 11400 8600 9150Operating expenses 5,700 5,500 6,000Net income $ 5700 $ 3100 $ 3150ADDITIONAL INFORMATION1. Sub was an 80 percent-owned subsidiary of Pub Corporation throughout the 2019–2021 period. Pub’s separate income (excludes income from Sub) was $7,200,000, $6,600,000, and $7,500,000 in 2019, 2020, and 2021, respectively. Pub acquired its interest in Sub at its underlying book value, which was equal to fair value on July 1, 2017.2. Pub sold inventory items to Sub during 2019 at a gross profit to Pub of $720,000. Half the merchandise remained in Sub’s inventory at December 31, 2019. Total sales by Pub to Sub in 2019 were $1,800,000. The remaining merchandise was sold by Sub in 2020.3. Pub’s inventory at December 31, 2020, included items acquired from Sub on…
Comparative income statements of Sub Corporation for the calendar years 2019, 2020, and 2021 are as follows (in thousands): Sales Cost of sales Gross profit Operating expenses Net income 2019 $22,000 10,600 11400 5,700 $5700 2020 $18,500 9,900 8600 5,500 $3100 2021 $19,250 10,100 9150 6.000 $3150 ADDITIONAL INFORMATION 1. Sub was an 80 percent-owned subsidiary of Pub Corporation throughout the 2019-2021 period. Pub's separate income (excludes income from Sub) was $7,200,000, $6,600,000, and $7,500,000 in 2019, 2020, and 2021, respectively. Pub acquired its interest in Sub at its underlying book value, which was equal to fair value on July 1, 2017. 2. Pub sold inventory items to Sub during 2019 at a gross profit to Pub of $720,000. Half the merchandise remained in Sub's inventory at December 31, 2019. Total sales by Pub to Sub in 2019 were $1,800,000. The remaining merchandise was sold by Sub in 2020. 3. Pub's inventory at December 31, 2020, included items acquired from Sub on which Sub…
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P Corporation owns 80 percent of S Inc.’s common stock. During 2020, P sold Inventory to S for $250,000 on the same terms as sales made to third parties. S sold all of the inventory purchased from P in 2020 The following information pertains to S and P sales for 2020 P s Sales $1,000,000 $ 700,000 Cost of Sales (400,000) (350,000) Gross Profit $ 600,000 $ 350,000 What amount should P report as cost of sales in its 2021 consolidated income statement Select one: a. $680,000 b. $430,000 c. $750,000 d. $500,000
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am. 122.
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Hodge Co. owns 90 percent of the voting common shares of Bison Co. During 2022, Hodge had sales of $1.12 million and cost of goods sold of $840K. Additionally, In 2022, Bison record sales of $420K and cost of goods sold of $252K. In the amounts report for Bison's sales were intra-entity gross profits related to Bison's intra-entity transfer of merchandise to Hodge for $140K. (Note: there were no intra-entity transfers from Hodge to Bison) Intra-entity transfers had the same markup as sales to outsiders. At the end of 2022, Hodge stDI had 40 percent of the Intra-entity gross profit remaining in ending Inventory. What are consolidated sales and cost of goods sold for 2022? Multiple Choice $1.54M sales and $1078M COGS. $1AM sales and $952K COGS. S1AM sales and S966K COGS. $1.4M sales and S974.4K COGS $1.54M sales and $1.092M COGS