Problem 7-22 (Algo) (LO 7-6) Lake acquired a controlling interest in Boxwood several years ago. During the current fiscal period, the two companies individually reported the following income (exclusive of any investment income): Lake Boxwood $ 360,000 90,000 Lake paid a $60,000 cash dividend during the current year, and Boxwood distributed $14,000. Boxwood sells inventory to Lake each period. Intra-entity gross profits of $22,400 were present in Lake's beginning inventory for the current year, and its ending inventory carried $32,900 in intra-entity gross profits. View each of the following questions as an independent situation. The effective tax rate for both companies is 21 percent. a. If Lake owns a 60 percent interest in Boxwood, what total income tax expense must be reported on a consolidated income statement for this period? (Round the intermediate calculations and final answers to the nearest dollar amount.) b. If Lake owns a 60 percent interest in Boxwood, what total amount of income taxes must be paid by these two companies for the current year? (Round the intermediate calculations and final answers to the nearest dollar amount.) c. If Lake owns a 90 percent interest in Boxwood and a consolidated tax return is filed, what amount of income tax expense would be reported on a consolidated income statement for the year? Amount a Total income tax expense b. Income tax payableLake Income tax payableBoxwood Total income tax payable $ 0 C. From Income tax expense