X Inc. owns 80% of Y Inc. During 2021, X Inc. sold inventory to Y for a gross profit $10,000. At the end of 2021, 60% of this inventory remained in the warehouses of Y. As well, in 2021, Y Inc. sold inventory to X Inc. for a gross profit of $5,000. At the end of 2021, 25% of the inventory remained in the warehouses of X.

Answer the questions below, but treat each question independent from one another.

Question 1: Further, in 2021, Y Inc. sold land to X Inc, at a gross profit of $12,000. This land was not sold to outsiders by the end of 2021. Assuming a tax rate of 40%, what is the consolidated realized profit for the transactions above, for 2021? Question 2: Assuming a tax rate of 30% what would be the amount of Deferred Tax that would appear on the consolidated balance sheet at the end of 2021?

Question 3: Assuming a tax rate of 20%, what is the consolidated un-realized profit for the transactions above, for 2021?

Question 4: Further, in 2021, Y Inc. sold land to X Inc, at a gross profit of $12,000. This land was sold to outsiders by the end of 2021. Assuming a tax rate of 25%, what is the consolidated un- realized profit for the transactions above, for 2021?

Answer rating: 100% (QA)

Answer Question 1 Consolidated Realized Profit for 2021 Inventory Transactions Gross Profit on Inventory Sold by X Inc to Y Inc 10000 Unrealized Profi... View the full answer