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Problem 6-9 (LO 3) Worksheet, consolidated
During 2017, Parson sells $60,000 worth of merchandise to Solar. Solar holds $15,000 of this merchandise in its ending inventory. Solar owes $10,000 to Parson as a result of these intercompany sales. Parson has a gross profit rate of 40%.
On January 1, 2015, Parson sells equipment having a net book value of $50,000 to Solar for $80,000. The equipment has a 5-year useful life and is
On January 1, 2017, Solar sells equipment to Parson at a profit of $25,000. The equipment has a 5-year useful life and is depreciated using the straight-line method.
Neither company has provided for income tax. The companies qualify as an affiliated group and, thus, will file a consolidated tax return based on a 40% corporate tax rate. The original purchase is not a nontaxable exchange.
On December 31, 2017, Parson and Solar have the following
Required
Prepare a consolidated worksheet for the year ended December 31, 2017. Include a provision for income tax and income distribution schedules.
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Chapter 6 Solutions
ADVANCED ACCOUNTING
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