Boulder Corporation owns all of the stock of PebbleCo, so they constitute a Federal affiliated group and a parent-subsidiary controlled group. By completing the following chart, delineate for Boulder's tax department some of the effects of an election to file Federal consolidated income tax returns.

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If the Group Files a Consolidated Return If Separate Income Tax Returns Continue to Be Filed Situation a. PebbleCo pays a $1 million cash b. Taxable income for both group C. Boulder's tax liability is $95,000, and d. Boulder uses the LIFO method for its dividend to Boulder members this year is $50,000. Pebble's liability totals $75,000. inventories, but Pebble wants to use FIFO for its own inventories.