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Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik
Edition 10ISBN: 978-1260575910Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik
Edition 10ISBN: 978-1260575910 Exercise 12
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 30 percent.
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 30 percent.
Explanation
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Verified
Consolidated balance sheet:
The consoli...
Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik
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