Question
For each of the following situations, select the best answer concerning accounting for income taxes in combinations: (A) May file a consolidated income tax return.
For each of the following situations, select the best answer concerning accounting for income taxes in combinations: (A) May file a consolidated income tax return. (B) May not a file consolidated income tax return. (C) Must file a consolidated income tax return. _____1. Parent company owns 85% of the voting stock of the subsidiary, and there are significant intercompany transactions. _____2. Subsidiary is a foreign corporation. _____3. Parent company owns 90% of the voting stock of the subsidiary, but there are no intercompany inventory transactions. _____4. Parent company owns 75% of the voting stock of the subsidiary but there are no intercompany inventory transactions. _____5. Parent company owns 90% of the voting stock of the subsidiary, and there are intercompany inventory transactions with transferred goods in ending inventory. _____6. Parent company owns 75% of the voting stock of the subsidiary and there are intercompany inventory transactions with transferred goods in ending inventory.
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