Solution-What adjustment should be made to income tax

What adjustment should be made to income tax expense

Assignment Help Accounting Basics

Reference no: EM132771587

Question - X owns 100% of the common shares of Y. Both companies pay income tax at the rate of 40%. On January 1st.2020, X reported a gain of $20,000 when it sold equipment to Y. This equipment had a remaining life of 5 years on the date of the intercompany sale. When preparing the consolidated income statement for 2021, what adjustment should be made to income tax expense?

1. Increase it by $1,600

2. Decrease by $1,600

3. Increase it by $4,800

4. Decrease it by $4,800.

Reference no: EM132771587

Questions Cloud

How much profit on average will macdonald make on each eagle : How much profit, on average, will MacDonald make on each Eagle? MacDonald Manufacturing Ltd is a well-known manufacturer of high tech products.

What is the total cost of the building : The entity began the self construction of a building on january 1 2020 and the building was completed on december 31 2020. What is total cost of the building

Globalization affected different world regions : How has globalization affected different world regions? What are some of the benefits and costs of globalization for different sectors of society?

Make a t- account and trial balance : Make a T- account, trial balance, and balance sheet for the transaction. Borrowed $45 000 from the bank, which was deposited in the business' bank account.

What adjustment should be made to income tax expense : X owns 100% of the common shares of Y. Both companies pay income tax at the rate of 40%. What adjustment should be made to income tax expense

Which fixed assets are normally presented on balance sheet : Which Fixed Assets are normally presented on the balance sheet at? Initial cost less accumulated depreciation less salvage value

Cultivating collaboration : After watching the video above, Cultivating Collaboration: Don't Be So Defensive! | Jim Tamm | TEDxSantaCruz, summarize the key points from the video in terms o

What types of government audits exist : What types of government audits exist? What are the differences between each type? Inregards to governmental and non profit accounting

Special assessment be performed in lieu : Why must this special assessment be performed in lieu of another strategic alternative assessment, such as a SPACE analysis?

User Account

All Pages

What adjustment should be made to income tax expense

Reference no: EM132771587

Reference no: EM132771587

Questions Cloud

Reviews

Write a Review

Accounting Basics Questions & Answers

How much control does fed have over this longer real rate

Coures:- fundamental accounting principles

Accounting problems

Theory of interest - term structure of interest rates

Write a report on internal controls

Prepare the bank reconciliation for company

Cost-benefit analysis

Theory of interest

Liquidity and profitability

What is the expected risk premium on the portfolio

Simple interest and compound interest

Capm and venture capital

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT