Question: Winter Corporation owns 80 percent of Ray Guard Corporation s stock

Winter Corporation owns 80 percent of Ray Guard Corporation's stock and 90 percent of Block Company's stock. The companies file a consolidated tax return each year and in 20X5 paid a total tax of $80,000. Each company is involved in a number of intercompany inventory transfers each period. Information on the companies' activities for 20X5 is as follows:



Required
a. Determine the amount of income tax expense that should be assigned to each company.
b. Compute consolidated net income and income to the controlling interest for20X5.


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  • CreatedMay 23, 2014
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