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The following table shows selected amounts from the separate financial statements of a parent company (unconsolidated) and one of its subsidiaries. Note that 1) the
The following table shows selected amounts from the separate financial statements of a parent company (unconsolidated) and one of its subsidiaries. Note that 1) the parent company owns 100% of the subsidiary; 2) During the year the parent company sold some inventory to the subsidiary for $1,000 in scenario I and for $1,700 in scenario I1. It had cost the parent company $1,000. The subsidiary further sold the inventory to an unrelated party for $2,000. 3) Located in two different countries, the parent company and the subsidiary have different income tax rates. Specifically, the rate for the parent company is 25% and the rate for the subsidiary is 50%. 4) Companies do not pay tax if their income is equal to or less than zero Please calculate and fill the cells with question marks. Copy and paste the table to a Word file and submit the file before the deadline Scenario l Scenario II Parent Company ($) Subsidiary (S,) Company (s) Subsidiary (S) Parent Sales 1,000 2,000 1,700 2,000 Cost of goods sold 1,000 1,000 1,000 1,700 Gross profit Operating expense 100 100 100 100 Taxable income Income tax Net Income
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