Arriba and its 80 percent-owned subsidiary (Abajo) reported the following figures for the year ending December 31, 2021 (credit balances indicated by parentheses). Abajo paid dividends of $34,000 during this period. Abajo $(340,000) 158,800 68,000 Arriba Sales Cost of goods sold Operating expenses Dividend income $(680,000) 340,000 197, 200 (27,200) $(170,000) Net income $(113,200) In 2020, intra-entity gross profits of $34,000 on upstream transfers of $102,000 were deferred into 2021. In 2021 intra-entity gross profits of $45,200 on upstream transfers of $124,400 were deferred into 2022. a. What amounts appear for each line in a consolidated income statement for the year ending December 31, 2021? 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 21 percent.

Arriba and its 80 percent-owned subsidiary (Abajo) reported the following figures for the year ending December 31, 2021 (credit balances indicated by parentheses). Abajo paid dividends of $34,000 during this period. Abajo $(340,000) 158,800 68,000 Arriba Sales Cost of goods sold Operating expenses Dividend income $(680,000) 340,000 197, 200 (27,200) $(170,000) Net income $(113,200) In 2020, intra-entity gross profits of $34,000 on upstream transfers of $102,000 were deferred into 2021. In 2021 intra-entity gross profits of $45,200 on upstream transfers of $124,400 were deferred into 2022. a. What amounts appear for each line in a consolidated income statement for the year ending December 31, 2021? 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 21 percent.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 1RE: Brandt Corporation had sales revenue of 500,000 for the current year. For the year, its cost of...

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Brandt Corporation had sales revenue of 500,000 for the current year. For the year, its cost of goods sold was 240,000, its operating expenses were 50,000, its interest revenue was 2,000, and its interest expense was 12,000. Brandts income tax rate is 30%. Prepare Brandts multiple-step income statement for the current year.
The income statement, statement of retained earnings, and balance sheet for Somerville Company are as follows: Includes both state and federal taxes. Refer to the information for Somerville Company on the previous pages. Also, assume that the price per common share for Somerville is 8.10. Required: Compute the price-earnings ratio. (Note: Round the answer to two decimal places.)
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