Reference no: EM13350335

Question

1) The Brandon Company a manufacturer as well as the Schimmel Company a retailer entered into a business combination whereby Brandon Company acquired for cash each of the outstanding voting common stock of Schimmel Corporation

?The Brandon Company is making consolidated financial statements immediately afterward the consummation of the newly formed business combination. How must the Brandon Company determine the amounts reported as assets and liabilities of the Schimmel Company? Presumptuous the transaction resulted in goodwill how will the amount of goodwill be determined?

?Under what situation must Schimmel Company be included in the entity's consolidated financial statement?

2) Sagehen Enterprises reports pretax financial income of $80,000 for 2012. The following cause taxable income to be different from pretax financial income:

?Depreciation on the tax return is greater than depreciation on the income statement by $15,000

?Rent collected on the tax return is $25,000 greater than rent earned on the income statement

?Fines reported on the income statement were $10,000

The current tax rate is 30%. There are no deferred taxes at the beginning of 2012

Compute taxable income as well as income tax payable for 2012. Which of the differences are temporary and which are permanent?

For additional facts refer to the Homework Assignment Rubric document in the Assignment Guidelines and Rubrics section of the course