Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

X Inc. owns 80% of Y Inc. During 2021, X Inc. sold inventory to Y. The cost of this inventory was $7,000. The profit markup

X Inc. owns 80% of Y Inc. During 2021, X Inc. sold inventory to Y. The cost of this inventory was $7,000. The profit markup was 30%. At the end of 2021, 65% of this inventory remained in the warehouses of Y. As well, in 2021, Y Inc. sold inventory to X Inc. the cost of the inventory was $4,000. The profit mark up was 40%. At the end of 2021, 25% of the inventory remained in the warehouses of X. Further, in 2021, Y Inc. sold land to X Inc, at a gross profit of $12,000. This land was not sold to outsiders by the end of 2021.

1. Assuming a tax rate of 25% what would be the amount of Deferred Tax that would appear on the consolidated balance sheet at the end of 2021?

2. Assuming a tax rate of 30% what would be the amount of Deferred Tax that would appear on the consolidated balance sheet at the end of 2021?

3. Assuming a tax rate of 30%, what is the consolidated realized profit for the transactions above, for 2021?

4. Assuming a tax rate of 40% what would be the amount of Deferred Tax that would appear on the consolidated balance sheet at the end of 2021?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Tools for Business Decision Making

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

7th edition

978-1118344262, 111834426X, 1118162285, 978-1118562208, 1118562208, 978-1118162286

More Books

Students also viewed these Accounting questions

Question

What module contains Pillows shape-drawing code?

Answered: 1 week ago

Question

Find the investors expected profit.

Answered: 1 week ago

Question

mple 10. Determine d dx S 0 t dt.

Answered: 1 week ago

Question

The belance in Discount on Bonds Perable

Answered: 1 week ago