The income tax expense and the income tax currently payable

Assignment Help Financial Management

Reference no: EM131917136

On January 1, 2017, Abbey acquires 90 percent of Benjamin's outstanding shares. Financial information for these two companies for the years of 2017 and 2018 follows:

2017 2018

Abbey Company:

Sales $ (500,000 ) $ (700,000 )

Operating expenses 300,000 400,000

Intra-entity gross profits in ending inventory (included in above figures) (120,000 ) (150,000 )

Dividend income—Benjamin Company (18,000 ) (36,000 )

Benjamin Company:

Sales (210,000 ) (270,000 )

Operating expenses 130,000 170,000

Dividends paid (20,000 ) (40,000 )

Assume that a tax rate of 35 percent is applicable to both companies.

On consolidated financial statements for 2018, what are the income tax expense and the income tax currently payable if Abbey and Benjamin file a consolidated tax return as an affiliated group?

On consolidated financial statements for 2018, what are the income tax expense and income tax currently payable if they choose to file separate returns?

Reference no: EM131917136

Questions Cloud

Initiating precipitation of chloride : If a precipitate will not form, what chloride ion concentration will cause a precipitate of silver chloride to form?

What would the minimum penalty cost have to be : Suppose that the company wants to crash the project a total of 4 days. Based on the information provided in the table and in part c) and the results.

Write a function that load the contents of a given text file : Write a function that loads the contents of a given text file into memory. Once loaded into memory you should output the text to the Console Window.

Trade credit-nominal cost and effective cost : The Thompson Corporation projects an increase in sales from $1 million to $3 million, What is the effective, or equivalent, annual cost of the trade credit?

The income tax expense and the income tax currently payable : what are the income tax expense and the income tax currently payable if Abbey and Benjamin file a consolidated tax return as an affiliated group?

What is the concentration of f : What is the concentration of F- in the solution when the reaction is complete?

What is the best use for these common-size : What is the best use for these common-size? when would you use them?

Comment on the process strategy at wheeled coach case : What alternate strategy would your recommend that Wheeled Coach use to improve their currently assembly line approach?

Tax purposes to zero over the four year life of project : The necessary capital investment is $3.4 million, which will be depreciated for tax purposes to zero over the four year life of the project.

User Account

All Pages