Reference no: EM132567896

Parent Company owns 55% of Subsidiary company. The 2019 Income Statements of both companies are as following below. Fiscal Year in both companies end same on December 31. Both companies have a tax rate of 35%.

                                                        Parent                       Subsidiary

Gross Profit                                80,000                    60,000

Miscellaneous Expenses                  20,000                    20,000

Depreciation Expense                     30,000                     15,000

Income Tax Expense                         10,500                     8,750

Net Income                                   19,500                       16,250

On July 01, 2019 Subsidiary sold equipment to Parent at a profit of $9,000 (before tax). The equipment had a remaining useful life of 25 years on that date. At the end of 2019, Subsidiary declared and paid $3,000 dividend.

ASKING:

Question 1: Calculation of 2019 Consolidated Net Income as at December 31, including the share attributable to the N.C.I. (Non-Controlling Interest).

Question 2: Calculation of the amount of Income Tax Expense as at December 31 papering on the 2019 Consolidated Income Statement.