1. Glacier Company owns 70% of Guadalupe Company. During the current year Guadalupe reported net income of $500,000 and paid dividends of $200,000. The tax rate is 25%. Assume dividends received are deducted at 65% for ownership between 20% and 80%. What differed income tax liability should be recognized?

a. 12,250

b. 49,000

c. 17,500

d. 18,375

e. 73,500

2. Glacier Company owns 70% of Guadalupe Company. During the current year Guadalupe reported net income of $500,000 and paid dividends of $200,000. The tax rate is 25%. Assume dividends received are deducted at 65% for ownership between 20% and 80%. What current tax liability is created by this dividend payment?

a. 12,250

b. 49,000

c. 17,500

d. 18,375

e. 73,500