Parson Company acquired an 80 percent interest in Syber Company on January 1, 2017. Any portion of Syber's business fair value in excess of its corresponding book value was assigned to trademarks. This intangible asset has subsequently undergone annual amortization based on a 15-year life. Over the past two years, regular intra-entity inventory sales transpired between the two companies. No payment has yet been made on the latest transfer. All dividends are paid in the same period as declared.

The individual financial statements for the two companies as well as consolidated totals for 2018 follow:

	Parson Company				Syber Company				Consolidated Totals
Sales	$	(840,000	)		$	(640,000	)		$	(1,352,000	)
Cost of goods sold		520,000				420,000				818,000
Operating expenses		108,000				112,000				222,500
Income of Syber		(80,800	)			0				0
Separate company net income	$	(292,800	)		$	(108,000	)
Consolidated net income									$	(311,500	)
Net income attributable to noncontrolling interest										18,700
Net income attributable to Parson Company									$	(292,800	)
Retained earnings, 1/1/18	$	(617,600	)		$	(298,000	)		$	(617,600	)
Net income (above)		(292,800	)			(108,000	)			(292,800	)
Dividends declared		74,000				34,000				74,000
Retained earnings, 12/31/18	$	(836,400	)		$	(372,000	)		$	(836,400	)
Cash and receivables	$	338,000			$	84,000			$	399,200
Inventory		194,000				168,000				350,500
Investment in Syber Company		380,400				0				0
Land, buildings, and equipment		388,000				272,000				660,000
Trademarks		0				0				32,500
Total assets	$	1,300,400			$	524,000			$	1,442,200
Liabilities	$	(290,000	)		$	(68,000	)		$	(337,600	)
Common stock		(140,000	)			(84,000	)			(140,000	)
Additional paid-in capital		(34,000	)			0				(34,000	)
Noncontrolling interest in Syber		0				0				(94,200	)
Retained earnings (above)		(836,400	)			(372,000	)			(836,400	)
Total liabilities and equities	$	(1,300,400	)		$	(524,000	)		$	(1,442,200	)

i. With a tax rate of 40 percent, what income tax journal entry is recorded if the companies prepare a consolidated tax return? j. With a tax rate of 40 percent, what income tax journal entry recorded if these two companies prepare separate tax returns? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req A to H Req I and ] i. With a tax rate of 40 percent, what income tax journal entry is recorded if the companies prepare a consolidated tax return? j. With a tax rate of 40 percent, what income tax journal entry is recorded if these two companies prepare separate tax returns? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Show less No Transaction General Journal Debit Credit 1 1 124,600 Income tax expense Income tax payable 124.600 2 2 Income tax expense Income tax payable ool 84,800 84,800 3 3 Income tax expense 40,800 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 Abbey Company: Sales $ (784, 000) $ (890,000) 540,000 546,000 (122, 000) (9,000 (235, 000) (40,500) Operating expenses Intra-entity gross profits in ending inventory (included in above figures) Dividend income-Benjamin Company Benjamin Company: Sales Operating expenses Dividends paid (275, 000) 156,000 (10,000) (284,000) 182,000 (45,000) 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? Answer is complete but not entirely correct. a. $ 133,200 $ 133,200 Income tax expense Income tax payable Income tax expense Income tax payable b. $ 133,200 $ 40,800