Consolidated taxable income and consolidated tax liability

Assignment Help Financial Accounting
Reference no: EM13788172

ParentCo and SubCo are calendar year corporations that keep their respective books on the accrual basis. The companies have taxable income of $200,000 and $250,000, respectively, for tax year 2013 (before consolidation adjustments, elimination entries and charitable deductions). The following transactions are included:

Land was sold by ParentCo to a third party for $100,000. The land was acquired from SubCo in 2011. SubCo acquired the land in 2008 for $50,000.

ParentCo’s taxable income includes a $12,000 dividend SubCo paid to ParentCo.

ParentCo lends SubCo $150,000 in January 2013. SubCo repaid the loan with $6,000 interest in December 2013.

ParentCo and SubCo contribute $17,000 and $11,000 to charity, respectively.

SubCo earned $1,600 of tax exempt interest income which is not included in SubCo’s $250,000 taxable income.

Directions:

Calculate the consolidated taxable income and consolidated tax liability of ParentCo and SubCo for 2013. Than calculate the basis of ParentCo’s stock at the end of 2013, assuming that it was $1,000,000 at the beginning of the year.

Requirements:

 

Clearly identify the requirements being addressed. Show all calculations within the cells of an Excel spreadsheet. This means that you must use formulas and links so that you’re thought process can be examined. Make good use of comments to convey your thought process as well. No hard coding of solutions. Submit a single Excel file for grading. Review the grading rubric, which can be accessed from the Course Information page, to understand how you will be graded on this assignment. Reach out to your instructor if you have questions about the assignment.

Reference no: EM13788172

Questions Cloud

Equivalent units of work completed and transferred out : Berkeley Bag manufactures high end book bags. One product line is a shoulder bag designed for trade fairs and conferences that the company "seeds" with products specified by the customer. The equivalent units of work completed and transferred out in ..
What is unethical behavior : What is unethical behavior as it relates to the criminal justice field and should all criminal justice professionals have ethical training as a requirement for their job position
What are the ethical implications of draft : You can choose to craft a general message, something that would be useful to all prospective students, or you can focus on a specific academic discipline or some other important aspect of your college experience. Make sure your introductory commen..
How are studio and live versions performed the differently : How are the studio and live versions performed the same or differently? The lyrics - are there changes or differences between the studio and live versions?
Consolidated taxable income and consolidated tax liability : ParentCo and SubCo are calendar year corporations that keep their respective books on the accrual basis. The companies have taxable income of $200,000 and $250,000, respectively, for tax year 2013. Calculate the consolidated taxable income and consol..
Discuss how these advances have changed the way : Write a 500-600 word paper identifying some of the technology used by law enforcement in carrying out their duties. Discuss how these advances have changed the way police do business
Belief of religious tradition issues : What topic did you find meaningful and inspiring, and how do you plan on integrating it into your belief system?
Annual interests on the unpaid balance : Assume that you will have a 10-year, $12,000 loan to repay when you graduate from college next month. The loan, plus 5 percent annual interests on the unpaid balance, is to be repaid in 10 annual instalments of $1,554 each, beginning one year after y..
Discuss the factors that lead to financial crises : How do increases in interest rates play a role in promoting financial crises - Discuss the factors that lead to financial crises

Reviews

Write a Review

 

Financial Accounting Questions & Answers

  Bonds as a long-term investment

McWherter Instruments sold $500 million of 8% bonds, dated January 1, on January 1, 2013. The bonds mature on December 31, 2032 (20 years). For bonds of similar risk and maturity, the market yield was 10%. Interest is paid semiannually on June 30 and..

  Step in an internal control program

Which of the following would be a step in an internal control program?

  Computation and evaluation of activity ratios

Compute the accounts receivable and inventory turnover ratios for 19X5. Alaska rounds all calculations to two decimal places.

  Illustrate what account was debited to amortize the discount

What is the unamortized amount of the discount or premium account at the beginning of the period? Illustrate what account was debited to amortize the discount or premium?

  Calculation of cost per equivalent unit for materials

Calculation of cost per equivalent unit for materials - The company wishes to have 10% of the next month's sales on hand at the end of each month.  Budgeted production for November is?

  Selling the assets in separate years

Explain why selling the assets in separate years will result in greater tax savings for Aruna

  Prepare a statement of cash flows for the year ended

Complete the December 31, 2011, balance sheet and prepare a statement of cash flows for the year ended December 31, 2011, using the indirect method.

  Journalize vopats admission to the firm of vopat and sigma

Journalize Vopats admission to the firm of Vopat and Sigma - It is agreed that the allowance for doubtful accounts should be $3,000 for the partnership. The fair value of the equipment is $23,500.

  Journal entry to record sales and cost of saleson 315

journal entry to record sales and cost of sales.on 315 janets spa purchased 90 plush robes from randys spa supplies.

  Determine the proper unit inventory price in cases

Determine the proper unit inventory price in the cases

  What is the profit rum would earn on the new product

What is the profit Rum would earn on the new product if all the manufacturing capacity allocated by management is used and the product is sold for $36 per unit?

  Standard costs when producing a tire

ZZ Tire Company has the following standard costs when producing a tire: They have gotten a special order for 30,000 custom tires that increase direct materials by $5 per tire and direct labor by $8 per tire. If they sell at the same price, should the..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd