Question: Up and its 80 percent owned subsidiary Down reported the

Up and its 80 percent owned subsidiary (Down) reported the following figures for the year ending December 31, 2011. Down paid dividends of $30,000 during this period.


In 2010, unrealized gains of $30,000 on upstream transfers of $90,000 were deferred into 2011.
In 2011, unrealized gains of $40,000 on upstream transfers of $110,000 were deferred into 2012.
a. What figures appear in a consolidated income statement?
b. What income tax expense should appear on the consolidated income statement if each company files a separate return? Assume that the tax rate is 30percent.
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  • CreatedOctober 04, 2014
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