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ParentCo owned 100% of SubCo for the entire year. ParentCo uses the accrual method of tax accounting, whereas SubCo uses the cash method. During the
ParentCo owned 100% of SubCo for the entire year. ParentCo uses the accrual method of tax accounting, whereas SubCo uses the cash method. During the year, SubCo sold raw materials to ParentCo for $30,000 under a contract that requires no payment to SubCo until the following year. Exclusive of this transaction, ParentCo had income for the year of $35,000, and SubCo had income of $50,000. The groups consolidated taxable income for the year was: Select one:
a. $115,000.
b. $ 85,000.
c. $ 80,000.
d. $150,000.
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