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'sstock, 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?

a. Tax Year for the Consolidated ReturnWhen a parent corporation (P) and its subsidiary (S) elect to…

Answered: P Corporation uses the calendar year as…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter19: Corporations: Distributions Not In Complete Liquidation

Section: Chapter Questions

Problem 1DQ

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Tempe Corporation is a calendar-year corporation. At the beginning of 2022, its election to be taxed as an S corporation became effective. Tempe Corporation's balance sheet at the end of 2021 reflected the following assets (it did not have any earnings and profits from its prior years as a C corporation): Asset Cash Accounts receivable Inventory Land Totals Adjusted Basis $ 23,000 41,800 172,000 41,800 218,000 162,000 126,000 $ 398,800 $ 408,800 FMV $ 23,000 Tempe Corporation's business income for the year was $43,000 (this would have been its taxable income if it were a C corporation). During 2022, Tempe Corporation sold all of the inventory it owned at the beginning of the year for $234,000. Built-in gains tax c. Assume the original facts, except the land was valued at $152,000 instead of $126,000. What is Tempe Corporation's built-in gains tax in 2022?
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Tempe Corporation is a calendar - year corporation. At the beginning of 2022, its election to be taxed as an S corporation became effective. Tempe Corporation's balance sheet at the end of 2021 reflected the following assets (it did not have any earnings and profits from its prior years as a C corporation): Asset Adjusted Basis FMV Cash $31,500 $ 31,500 Accounts receivable 46, 900 46,900 Inventory 206, 000 269,000 Land 196,000 143,000 Totals $ 480, 400 $ 490, 400 Tempe Corporation's business income for the year was $ 51,500 (this would have been its taxable income if it were a C corporation). During 2022, Tempe Corporation sold all of the inventory it owned at the beginning of the year for $ 302,000. a. What is its built - in gains tax in 2022 ? b. Assume the original facts, except that if Tempe Corporation were a C corporation, its taxable income would have been $ 8,800. What is its built - in gains tax in 2022?
Tempe Corporation is a calendar-year corporation. At the beginning of 2022, its election to be taxed as an S corporation became effective. Tempe Corporation's balance sheet at the end of 2021 reflected the following assets (it did not have any earnings and profits from its prior years as a C corporation): Asset Adjusted Basis FMV Cash $31,500 $ 31,500 Accounts receivable 46,900 46,900 Inventory 206,000 269,000 Land 196,000 143,000 Totals $ 480, 400 $ 490,400 Tempe Corporation's business income for the year was $51,500 (this would have been its taxable income if it were a C corporation). During 2022, Tempe Corporation sold all of the inventory it owned at the beginning of the year for $ 302,000. a. What is its built-in gains tax in 2022? b. Assume the original facts, except that if Tempe Corporation were a C corporation, its taxable income would have been $8,800. What is its built-in gains tax in 2022?
6. On December 31, 2021, ABC has earned financial income before tax of P3,240,850. The tax rate applicable for the current and future years is 30%. For purposes of determining the taxable income, the following items are considered for analysis and reconciliation: On January 1, 2021, ABC has acquired a depreciable property amounted to P1,000,000. For financial accounting purposes, it uses straight line method to depreciate it and sum of the year’s digit method for income tax purposes (with depreciation rate from year 1 to year 10 of 10/55, 9/55, 8/55, 7/55, 6/55, 5/55, 4/55, 3/55, 2/55, 1/55, respectively). The useful life of the asset is 10 years with no residual value. 3 years prepaid rent of P600,000 (P200,000 a year) paid December 31, 2021 that is applicable for the next 3 years starting 2022. Dividend income (received in cash) of P250,000 that is subject to 20% tax rate. Interest income on deposit (already credited to ABC’s deposit account) of P150,000 with 20% applicable tax…

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