What is the total amount of after-tax unrealized profit

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Q1. Par owns 90.41% of Sub Corp. Par sold depreciable assets to Sub on January 1, Year 3, at a before-tax gain of $45,901. On January 1, Year 4, Sub sold depreciable assets to Par at a before-tax gain of $91,803. Both assets are being depreciated over ten (10) years. The tax rate for both companies is 30.99%. What is the total amount of after-tax unrealized profit remaining at the end of Year 4?

a. $80,300

b. $78,241

c. $76,182

d. $84,418

e. $82,359

Q2. Par owns 88.25% of Sub Corp. Par sold depreciable assets to Sub on January 1, Year 3, at a before-tax gain of $39,115. On January 1, Year 4, Sub sold depreciable assets to Par at a before-tax gain of $78,231. Both assets are being depreciated over ten (10) years. The tax rate for both companies is 28.83%. What is the total amount of after-tax unrealized profit remaining at the end of Year 3?

a. $24,428

b. $23,802

c. $23,175

d. $25,681

e. $25,054

Reference no: EM133067437

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