Clarke has a controlling interest in Rogers's outstanding stock. At the current year-end, the following Information has been accumulated for these two companies: Dividende Paid $115,000 Clarke Separate Operating Income $697,500 (includes a $170,000 net unrealized gross profit in intra-entity ending inventory) 247,500 85,000 Rogers Clarke uses the initial value method to account for the investment in Rogers. The separate operating income figures just presented Include neither dividend nor other investment income. The effective tax rate for both companies is 40 percent a. Assume that Clarke owns 100 percent of Rogers's voting stock and is filing a consolidated tax return. What income tax amount does this affiliated group pay for the current period? b. Assume that Clarke owns 92 percent of Rogers's voting stock and is filing a consolidated tax return. What amount of income taxes does this affiliated group pay for the current period? c. Assume that Clarke owns 80 percent of Rogers's voting stock, but the companies elect to file separate tax returns. What is the total amount of income taxes that these two companies pay for the current period? d. Assume that Clarke owns 70 percent of Rogers's voting stock, requiring separate tax returns. What is the total amount of income tax expense to be recognized in the consolidated Income statement for the current period? e. Assume that Clarke owns 70 percent of Rogers's voting stock so that separate tax returns are required. What amount of income taxes does Clarke have to pay for the current year? a. Assume that Clarke owns 100 percent of Rogers's voting stock and is filing a consolidated tax return. What income tax amount does this affiliated group pay for the current period? b. Assume that Clarke owns 92 percent of Rogers's voting stock and is filing a consolidated tax return. What amount of income taxes does this affiliated group pay for the current period? c. Assume that Clarke owns 80 percent of Rogers's voting stock, but the companies elect to file separate tax returns. What is the total amount of income taxes that these two companies pay for the current period? d. Assume that Clarke owns 70 percent of Rogers's voting stock, requiring separate tax returns. What is the total amount of income tax expense to be recognized in the consolidated income statement for the current period? e. Assume that Clarke owns 70 percent of Rogers's voting stock so that separate tax returns are required. What amount of income taxes does Clarke have to pay for the current year? a. b c d Income tax Income tax Total amount of income tax Total amount of income tax expense Income tax le On January 1, 2017, Abbey acquires 90 percent of Benjamin's outstanding shares. Financial information for these two companies for the years of 2017 and 2018 follows: 2017 2018 $ (732,000) $(1,034,000) 532,000 628,000 Abbey Company Sales Operating expenses Intra-entity gross profits in ending inventory (included in above figures) Dividend income-Benjamin Company Benjamin Company. Sales Operating expenses Dividends paid (195,000) (13,500) (238,000) (31,500) (296,000) 126,000 (15,000) (323,000) 154,000 (35,000) Assume that a tax rate of 40 percent is applicable to both companies. a. On consolidated financial statements for 2018, what are the income tax expense and the income tax currently payable if Abbey and Benjamin file a consolidated tax return as an affiliated group? b. On consolidated financial statements for 2018, what are the income tax expense and income tax currently payable if they choose to file separate returns? Assume that a tax rate of 40 percent is applicable to both companies. a. On consolidated financial statements for 2018, what are the income tax expense and the income tax currently payable if Abbey and Benjamin file a consolidated tax return as an affiliated group? b. On consolidated financial statements for 2018, what are the income tax expense and income tax currently payable if they choose to file separate returns? Answer is not complete. $ 212,800 $ 212.800 Income tax expense Income tax payable Income tax expense Income tax payable b Assume that a tax rate of 40 percent is applicable to both companies. a. On consolidated financial statements for 2018, what are the income tax expense and the income tax currently payable if Abbey and Benjamin file a consolidated tax return as an affiliated group? b. On consolidated financial statements for 2018, what are the income tax expense and income tax currently payable if they choose to file separate returns? Answer is not complete. $ 212,800 $ 212.800 Income tax expense Income tax payable Income tax expense Income tax payable b
