1. During 2012, Pin Corporation owns 20 percent of Sob Corporation's preferred stock and 80 percent of its common stock. Sob's stock outstanding on December 31, 2012, is as follows:
10% cumulative preferred stock .................. $ 200,000
Common stock ...................................... 1,400,000
Sob reported net income of $120,000 for the year ended December 31, 2012. What amount should Pin record as equity in earnings of Sob for the year ended December 31, 2012?
a. $84,000
b. $96,000
c. $96,800
d. $100,000
2. Pat Corporation uses the equity method to account for its 25% investment in Sam, Inc. During 2011, Pat received dividends of $30,000 from Sam and recorded $180,000 as its equity in the earnings of Sam. Additional information follows:
? The dividends received from Sam are eligible for the 80 percent dividends-received deduction.
? There are no other temporary differences.
? Enacted income tax rates are 30 percent for 2011 and thereafter.
In its December 31, 2011, balance sheet, what amount should Pat report for deferred income tax liability?
a. $9,000
b. $10,800
c. $45,000
d. $54,000
3. In 2011, Pal Corporation received $300,000 in dividends from Sal Corporation, its 80 percent owned subsidiary. What net amount of dividend income should Pal include in its 2011 consolidated tax return?
a. $300,000
b. $240,000
c. $210,000
d. $0
4. Pot Corporation and Sly Corporation filed consolidated tax returns. In January 2011, Pot sold land, with a basis of $60,000 and a fair value of $75,000, to Sly for $100,000. Sly sold the land in December 2012 for $125,000. In its 2012 and 2011 tax returns, what amount of gain should be reported for these transactions in the consolidated return?
2012 2011
a ......................... $25,000 ................. $40,000
b ........................ $50,000 ......................... 0
c ........................ $50,000 ................. $25,000
d ........................ $65,000 ......................... 0
DATE
Question answered on Jul 22, 2018
PRICE: $17
Solution~000685301.zip (18.37 KB)