Q7) How much is the deferred amount for Abbeys separate return 2018? On January 1,...
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Q7) How much is the deferred amount for Abbeys separate return 2018? On January 1, 2017, Abbey acquires 90 percent of Benjamins outstanding shares. Financial information for these two companies for the years 2017 and 2018 follows:
|
| 2017 | 2018 |
| Abbey Company: |
|
|
| Sales | $(500,000) | $(700,000) |
| Operating expenses | 300,000 | 400,000 |
| Intra-entity gross profits in ending inventory (included in above figures) | (120,000) | (150,000) |
| Dividend incomeBenjamin Company | (18,000) | (36,000) |
| Benjamin Company: |
|
|
| Sales | (210,000) | (270,000) |
| Operating expenses | 130,000 | 170,000 |
| Dividends paid | (20,000) | (40,000) |
Assume that a tax rate of 35 percent is applicable to both companies. tax currently payable if they choose to file separate returns?
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