Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. on january 1, 2017, abbey acquires 90 percent of b

On January 1, 2017, Abbey acquires 90 percent of Benjamin's outstanding shares. Financial information for...

50.1K

Verified Solution

Question

Accounting

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

$

(860,000

)

$

(964,000

)

Operating expenses

572,000

636,000

Intra-entity gross profits in ending inventory (included in above figures)

(193,000

)

(226,000

)

Dividend incomeBenjamin Company

(13,500

)

(31,500

)

Benjamin Company:

Sales

(263,000

)

(325,000

)

Operating expenses

158,000

164,000

Dividends paid

(15,000

)

(35,000

)

Assume that a tax rate of 40 percent is applicable to both companies.

  1. 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?
  2. On consolidated financial statements for 2018, what are the income tax expense and income tax currently payable if they choose to file separate returns?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

I need a presentation about Herpes virus

Biology
Q

In the photoelectric effect current is produced immediately even with dim light This implies that...

Physics
Q

A rectangular box with a volume of 720 ft3 is to be constructed with a...

Basic Math
Q

Color of Car Frequency Black Blue Green Red White Total 15 8 6 24 60...

Statistics
Q

Suppose an investment account is opened with an initial deposit of $12,000 earning 7.2% interest...

Calculus
Q

Consider the following repeating decimal.(a) Write the repeating decimal as a geometric series. n=0(b) Write...

Calculus
Q

Gabriel coordinates games for a youth soccer league After Gabriel has figured out which teams...

Calculus
Q

Perform the operation. Write your answer in terms of i.(3/8-i/3)-(1/2-1/2i)

Algebra
Q

6. (TCO B) Sam owes Bob $8,000. Bob cancels (forgives) the debt. The cancellation is...

Accounting
Q

The variatie manufacturing costs per...

Accounting
Q

Harding Company is in the process of purchasing several large pieces of equipment from Danning...

Accounting
Q

Allerton Company acquires all of Deluxe Companys assets and liabilities for cash on January 1,2021,...

Accounting