Pike, Inc , owns 60 percent of Stark Company During the current year, Stark reported net income of $200,000 but paid a total cash dividend of only $40,000 What deferred income tax liability must be recognized in the consolidated balance sheet Assume the tax rate is 30 percent a $5,760 b $9,600 c $1...

A Equity income 60 of 200000 120000 Dividend income 6 ...

Pike, Inc., owns 60 percent of Stark Company. During the current year, Stark reported net income of

Question:

Pike, Inc., owns 60 percent of Stark Company. During the current year, Stark reported net income of $200,000 but paid a total cash of only $40,000. What deferred income tax liability must be recognized in the consolidated balance sheet? Assume the tax rate is 30 percent.
a. $5,760.
b. $9,600.
c. $12,840.
d. $28,800.
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...