1. On June 30, 2022, Past Company (Past) sold some land to its subsidiary, Sloan Ltd. (Sloan), for $380,000. The land had cost Past $200,000 when it was acquired three years previously. The transaction was subject to income tax at a rate of 20%. On April 1, 2024, Sloan sold the land to an outside party for $475,000. This transaction was also subject to income tax at a 20% rate. Past owns 75% of the outstanding shares of Sloan and accounts for its investment using the cost method. 
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3. What effect will the elimination of the unrealized intercompany gain (in the preparation of the consolidated income statement) have on consolidated income tax expense for 2022?

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The elimination of the unrealized intercompany gain will have an effect on the consolidated income t... View the full answer