What is McCannon’s taxable income in the fifth year, assuming the 80% taxable income limit applies for all the years
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McCannon Inc. has been in operations for four years. The first three years it accumulated operating losses of $82400. In the fourth year it earned $30900 in operating income. In the current year, its fifth year, it had $20600 of operating income and $5150 of dividend income from Irving Inc. McCannon owns 15% of Irving Inc. What is McCannon’s taxable income in the fifth year, assuming the 80% taxable income limit applies for all the years? [For your answer, please ignore the dollar sign and the comma.]
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- Grevilla Corporation is a manufacturing company. The corporation has accumulated earnings of $950,000, and it can establish reasonable needs for $400,000 of that amount. Calculate the amount of the accumulated earnings tax (if any) that Grevilla Corporation is subject to for this year. $_____________Par Inc owns 77.11% of Sub Corp. During the year, Par sold inventory to Sub for $79,271. Exactly 47.83% of this inventory remained in Y's warehouse at year end. Sub sold inventory to Par for $39,636 of which 39.47% remained in X's warehouse at year end. Both companies are subject to a tax rate of 28.35%. The gross profit percentage on sales is 20% for both companies. What is the after-tax dollar value of Par's unrealized profits during the year on its sales to Sub? a. $5,433 b. $5,977 c. $5,705 d. $5,569 e. $5,841McCannon Inc. has been in operations for four years. The first three years it accumulated operating losses of $115200. In the fourth year it earned $43200 in operating income. In the current year, its fifth year, it had $28800 of operating income and $7200 of dividend income from Irving Inc. McCannon owns 15% of Irving Inc. What is McCannon’s taxable income in the fifth year, assuming the 80% taxable income limit applies for all the years?
- Plumas, Inc., owns 75 percent of Santa Cruz Corporation. Both companies have been profitable for many years. During the current year, the parent sold for $134,500 merchandise costing $102,000 to the subsidiary, which still held 20 percent of this merchandise at the end of the year. Assume that the tax rate is 30 percent and that a consolidated tax return was filed. What deferred income tax asset amount is created?Tate, Inc. owns 80 percent of Jeffrey, Inc. During the current year, Jeffrey sold merchandise costing $60,000 to Tate for $75,000. At the end of the year, 10 percent of this merchandise was still being held. The tax rate is 30 percent. Assuming that a consolidated income tax return is being filed, what deferred income tax asset is created?At the beginning of the year, Clampett, Inc. had $100,000 in its AAA, $60,000 of earnings and profits from prior C corporation years. During the year, Clampett, Inc. earned $50,000 of ordinary income and paid $200,000 in distributions to its shareholders. Assume that J. D. owns 25% of Clampett, Inc., his basis in Clampett, Inc. at the beginning of the year is $10,000, and his share of the distribution was $50,000. How much income does J. D. recognize this year from these transactions? $10,000. $0. $40,000. $17,500. None of the choices are correct.
- Paloma, Inc., owns 90 percent of Blanca Corporation. Both companies have been profitable for many years. During the current year, the parent sold merchandise to the subsidiary at a transfer price of $194,000. In recording the transfer, the parent recognized cost of goods sold of $139,000. At the end of the year, the subsidiary still held 40 percent of this merchandise in its inventory. Assume that the tax rate is 21 percent. What deferred income tax asset amount is created if a consolidated tax return were filed?Palm Company owns 100% of Soso Company. During year X1, Soso sold merchandise costing $50,000 to Palm for $80,000. As of 12/31/X1, 40% of the merchandise remained in Palm's inventory. Assuming that Soso reported a $100,000 net income an paid $20,000 of dividends in year X1, how much investment income should should Palm recognize in year X1?Par owns 88.01% of Sub Corp. Par sold depreciable assets to Sub on January 1, Year 3, at a before-tax gain of $38,361. On January 1, Year 4, Sub sold depreciable assets to Par at a before-tax gain of $76,723. Both assets are being depreciated over ten (10) years. The tax rate for both companies is 28.59%. How much after-tax intercompany gain or loss was realized during Year 4 from Sub's sale of assets to Par in Year 4? а. $5,618 b. $5,226 C. $5,487 d. $5,095 е. $5.357
- ABC Co. and DEF Co. are joint venturers of XYZ Co., a producer of high tech machinery. ABC and DEF, each have a 50% interest in the net assets of XYZ Co. During the year, ABC Co. earns revenue of $1,000,000 from its own operations while DEF Co. reports revenue of $400,000. How much total revenue shall be reported in ABC Co.'s statement of profit or loss for the year? 1,000,000 1,200,000 1,400,000 either a orbRock Island Corporation generated taxable income (before deductions for depreciation, interest expense, and net operating loss carryovers) of $1 million this year. Taxable income was computed on $50 million of revenues and included $50,000 of interest income. The company paid $450,000 in interest expense. What is Rock Island's maximum business interest deduction for the year?At the start of the current year, SBC Corp. purchased 30% of Sky Tech Inc. for $45 million. At the time of purchase, the carrying value of Sky Tech's net assets was $75 million. The fair value of Sky Tech's depreciable assets was $15 million in excess of their book value. For this year, Sky Tech reported a net income of $75 million and declared and paid $15 million in dividends.The total amount of additional depreciation to be recognized by SBC over the remaining life of the assets is:
