1. Alpha Company owns 70% of Beta Company. During the year Alpha and Beta paid dividends. Where should the dividend payment to the noncontrolling interest be recorded in the consolidated statement of cash flows?

		As cash outflow from operating activities.
		As cash outflow from investing activities.
		As cash outflow from financing activities.
		As cash inflow from financing activities.
		They are not recorded in the consolidated cash flow statement.

2. On January 1, 2019, Biscayne Corporation purchased 80% of Arches corporation for $1,000,000. On December 31, 2019, Biscayne reports revenues of $800,000 and expenses of $450,000, and Arches reports revenues of $600,000 and expenses of $400,000. The parent figures contain no income from the subsidiary. The annual excess fair-value amortization is $40,000. What is the consolidated net income attributable to Biscayne Corporation?

		550,000
		510,000
		478,000
		440,000
		408,000

3. In regard to the filing of income taxes for an affiliated group:

		Domestic subsidiaries with less than 80% ownership may file consolidated tax return.
		Domestic subsidiaries with more than 80% ownership must file consolidated tax return.
		Foreign subsidiaries with more than 80% ownership must file consolidated tax return.
		Foreign subsidiaries with more than 80% ownership may file consolidated tax return.
		Domestic subsidiaries with more than 80% ownership may file consolidated tax return.

Lake Tahoe Company owns 100% of Lake George Company. On January 2, 2017, Lake Tahoe sold a boat with a carrying amount of $100,000 to Lake George for $140,000. The boat has 4 years of remaining life with no salvage value. Both entities use the straight-line method of depreciation. On the consolidated balance sheet dated December 31, 2018 (the year following the year of the sale), the boat should be recorded in the amount of (net of depreciation):

		$105,000
		$70,000
		$75,000
		$100,000
		$50,000

4. 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?

		$12,250
		$49,000
		$17,500
		$18,375
		$73,500