Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. anyone please explain this question 2. lake acq

Anyone please explain this question 2. Lake acquired a controlling interest in...

70.2K

Verified Solution

Question

Accounting

Anyone please explain this question image
2. Lake acquired a controlling interest in Boxwood several years ago. During the current fiscal period, the two companies individually reported the following income (exclusive of any investment income): Lake paid a $90,000 cash dividend during the current year, and Boxwood distributed $10,000. Boxwood sells inventory to Lake each period. Intra-entity gross profits of $18,000 were present in Lake's beginning inventory for the current year, and its ending inventory carried $32,000 in intra-entity gross profits. View each of the following questions as an independent situation. The effective tax rate for both companies is 21 percent. a. If Lake owns a 60 percent interest in Boxwood, what total income tax expense must be reported on a consolidated income statement for this period? b. If Lake owns a 60 percent interest in Boxwood, what total amount of income taxes must be paid by these two companies for the current year? c. If Lake owns a 90 percent interest in Boxwood and a consolidated tax return is filed, what amount of income tax expense would be reported on a consolidated income statement for the year

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Five years ago, Oleander, Inc. issued $10,000,000 worth of 15-year zero coupon bonds. The bonds carry...

Finance
Q

Out of six computer chips, two are defective. If two of the chips are chosen randomly for testing, compute...

Basic Math
Q

In Carol Duncan's article \"Art Museums and the Ritual of Citizenship,\" she traces the rise of...

Psychology
Q

4 In the circuit shown resistance reactance of R L respectively The and C are...

Physics
Q

In the adjoining diagram two geometrically identical capacitors A and B are connected to a...

Physics
Q

When two births are randomly selected the sample space for genders is bb bg gb...

Statistics
Q

Wildhorse Co. assembled the following information in completing its March bank reconciliation: Balance per bank...

Accounting
Q

Vollmer Manufacturing makes three components for sale to refrigeration companies. The components are processed on...

Accounting
Q

Why do companies often allocate a share of service department cost to production departments for...

Accounting
Q

The variance computed by multiplying the difference between the actual and standard quantity of materials...

Accounting
Q

Below are descriptions of internal control problems. Identify the one best internal control principle that...

Accounting
Q

For a business/product of your choice, explain what kind of pricing strategy have they chosen....

Accounting