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P Corporation uses the calendar year as its tax year and the accrual method as its overall accounting method. S Corporation uses a fiscal year ending June 30 as its tax year and the cash method as its overall accounting method. On July 31, 2022, P acquires all of S's stock, and the P-S affiliated group elects to file a consolidated tax return for 2022. a. What tax year must the group use in filing its consolidated tax return? b. What overall accounting method(s) can P and S Corporations use? c. What tax returns must the corporations file?

P Corporation uses the calendar year as its tax year and the accrual method as its overall accounting method. S Corporation uses a fiscal year ending June 30 as its tax year and the cash method as its overall accounting method. On July 31, 2022, P acquires all of S's stock, and the P-S affiliated group elects to file a consolidated tax return for 2022. a. What tax year must the group use in filing its consolidated tax return? b. What overall accounting method(s) can P and S Corporations use? c. What tax returns must the corporations file?

FINANCIAL ACCOUNTING
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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P Corporation uses the calendar year as its tax year and the accrual method as its overall accounting method. S Corporation uses a fiscal year ending June 30 as its tax year and the cash method as its overall accounting method. On July 31, 2022, P acquires all of S's stock, and the P-S affiliated group elects to file a consolidated tax return for 2022. a. What tax year must the group use in filing its consolidated tax return? b. What overall accounting method(s) can P and S Corporations use? c. What tax returns must the corporations file?
Transcribed Image Text:P Corporation uses the calendar year as its tax year and the accrual method as its overall accounting method. S Corporation uses a fiscal year ending June 30 as its tax year and the cash method as its overall accounting method. On July 31, 2022, P acquires all of S's stock, and the P-S affiliated group elects to file a consolidated tax return for 2022. a. What tax year must the group use in filing its consolidated tax return? b. What overall accounting method(s) can P and S Corporations use? c. What tax returns must the corporations file?
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