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Par owns 88.01% of Sub Corp. Par sold depreciable assets to Sub on January 1, Year 3, at a before-tax gain of $38,361. On January 1, Year 4, Sub sold depreciable assets to Par at a before-tax gain of $76,723. Both assets are being depreciated over ten (10) years. The tax rate for both companies is 28.59%. How much after-tax intercompany gain or loss was realized during Year 4 from Sub's sale of assets to Par in Year 4? a. $5,618 b. $5,226 C. $5,487 d. $5,095 e. $5 357

Par owns 88.01% of Sub Corp. Par sold depreciable assets to Sub on January 1, Year 3, at a before-tax gain of $38,361. On January 1, Year 4, Sub sold depreciable assets to Par at a before-tax gain of $76,723. Both assets are being depreciated over ten (10) years. The tax rate for both companies is 28.59%. How much after-tax intercompany gain or loss was realized during Year 4 from Sub's sale of assets to Par in Year 4? a. $5,618 b. $5,226 C. $5,487 d. $5,095 e. $5 357

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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Par owns 88.01% of Sub Corp. Par sold depreciable assets to Sub on January 1, Year 3, at a before-tax gain of $38,361. On January 1, Year 4, Sub sold depreciable assets to Par at a before-tax gain of $76,723. Both assets are being depreciated over ten (10) years. The tax rate for both companies is 28.59%. How much after-tax intercompany gain or loss was realized during Year 4 from Sub's sale of assets to Par in Year 4? а. $5,618 b. $5,226 C. $5,487 d. $5,095 е. $5.357
Transcribed Image Text:Par owns 88.01% of Sub Corp. Par sold depreciable assets to Sub on January 1, Year 3, at a before-tax gain of $38,361. On January 1, Year 4, Sub sold depreciable assets to Par at a before-tax gain of $76,723. Both assets are being depreciated over ten (10) years. The tax rate for both companies is 28.59%. How much after-tax intercompany gain or loss was realized during Year 4 from Sub's sale of assets to Par in Year 4? а. $5,618 b. $5,226 C. $5,487 d. $5,095 е. $5.357
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