Pop Corporation and its 70 percent-owned subsidiary, Son Corporation, have pretax operating incomes for 2016 as follows
Question:
Pop received $280,000 dividends from Son during 2016. A previously unrecorded patent from Pop's investment in Son is being amortized at a rate of $50,000 per year (the same time horizon is used for both book and tax purposes). On January 1, 2016, Pop sold equipment to Son at a $200,000 gain. Son is depreciating the equipment at a rate of 20 percent per year. A flat 34 percent tax rate is applicable to both companies.
REQUIRED:
Prepare a consolidated income statement for Pop Corporation and Subsidiary for 2016. (Assume no deferred tax balance on January 1, 2016.)
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Related Book For
Advanced Accounting
ISBN: 978-0134472140
13th edition
Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith
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