The following table shows selected amounts from the separate financial statements of a parent company...
90.2K
Verified Solution
Link Copied!
Question
Accounting
The following table shows selected amounts from the separate financial statements of a parent company (unconsolidated) and one of its subsidiaries. Note that 1) the parent company owns 100% of the subsidiary; 2) During the year the parent company sold some inventory to the subsidiary for $1,000 in scenario I and for $1,700 in scenario II. It had cost the parent company $1,000. The subsidiary further sold the inventory to an unrelated party for $2,000. 3) Located in two different countries, the parent company and the subsidiary have different income tax rates. Specifically, the rate for the parent company is 25% and the rate for the subsidiary is 50%. 4) Companies do not pay tax if their income is equal to or less than zero.
Please calculate and fill the cells with question marks.
Scenario I
Scenario II
Parent Company ($)
Subsidiary ($)
Parent Company ($)
Subsidiary ($)
Sales
1,000
2,000
1,700
2,000
Cost of goods sold
1,000
1,000
1,000
1,700
Gross profit
?
?
?
?
Operating expense
100
100
100
100
Taxable income
?
?
?
?
Income tax
?
?
?
?
Net Income
?
?
?
?
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!
